1. Innovate.
2. Exploit.
You start by innovating a "fast horse". This gains you early adopters who pull in a larger audience. A horse can only be so fast, so continued innovation might lead to something more like a car. This will only cause you to bleed users. Stick to the horse.
Instead of continuing to innovate endlessly, you switch to exploitation. Fire the visionaries. They're just a waste of payroll. Bring in people who can squeeze every last dime out of your user base.
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The above isn't anything new. However, it's clear that some companies are better at maintaining quality while exploiting. Are they doing something different, or is it just that their customers have to choose them repeatedly? e.g. Most people don't sign up with one car company for life. They'll buy several cars over their life and that's a choice that the car company must win each time. Meanwhile, people sign up for Netflix or Spotify and stay subbed. They don't look at the alternatives every few years. Porsche needs to keep up with the latest and fastest horses to continue exploiting their reputation, while Netflix can focus purely on making more money from their users. A faster horse may come along, but Netflix doesn't break down and need to be replaced.
Netflix has their content as their moat. Even if someone today builds a better version of what Netflix used to be, it wouldn't matter. They won’t have the rights and licenses to the shows and movies. That’s what keeps people from switching.
Porsche has to keep earning you as a customer with every new model. Netflix just needs to keep you watching.
Only Netflix-produced shows apply here. Before Netflix started producing content they had *no moat*.
That's the big problem with media streaming - the content owners have all the leverage. Any profit you make they can see and simply increase licensing costs to transfer to them. If you don't want to pay they can (and will, and have done) start their own competitor since the technology isn't a moat - content ownership is.
The situation with streaming platforms are exactly equivalent, and these content production studios have learnt to prevent this sort of anti-trust legislations from forming.
in fact, the cinema ownership decree has been ended i think: https://www.laineygossip.com/with-sonys-purchase-of-alamo-dr...
What, apart from Stranger Things and Squid Game, has been enough of a cultural touchstone that it keeps people on Netflix? Those aren't things you keep coming back to again and again.
Netflix doesn't own Friends, Seinfeld, The Office, Community, Parks and Rec, etc.
I'd argue Max (nee HBO) has better legacy titles and franchises. They have both enduring IP as well as the reputation of being "destination television".
The thing that keeps people from cancelling Netflix is that they have a better content slate of licensed classics paired with new originals. And they do it in the greatest volume of all the streamers, so there will be "something" on, even if it isn't particularly good.
Arcane was a pretty big deal and it was released on Netflix and TenCent.
They also have continued series that originated on other networks, including Unsolved Mysteries and Black Mirror.
I know several people who watched Cyberpunk: Edgerunners on Netflix and are excited about the upcoming CDPR and Netflix project set in the Cyberpunk universe.
I’ve had recommended to me and have recommended to others quite a few of their original movies. You might like 6 Undergound if you’re looking for an action movie.
And yeah, Bridgerton, Wednesday, Emily in Paris, and 3 Body Problem each certainly take their moment at least in my circles.
I think the Jeffrey Dahmer one was also big, because there have been so many stupid memes about him since then, from people who weren't around to hear about him on the news.
I guess it's market-related. Your remarks remind me of Behringer. They make products for the music and audio enthusiasts. They have decent quality products at a very fair price that have been around for 10+ years now (like the X32 mixer) and apart from that, they churn out new products all the time (especially remakes of vintage synthesisers) to keep their users coming back and check out what's new.
If you start the slow growth path at 30 and retire at 65 you will overall make more money from that thing vs someone who sells out at 35. There are some catches though. The person who sells out can go on to the next thing which in sum total may be more sell out enough to make far more over their lifetime, while the slow growth plan you are stuck. The slow growth is over very slow at first, you often spend 10 years making far less than someone who is "working for the man", then 15 more years more or less even, and only then start making good money. There is no guarantee that you will be successful, some people spend their entire life making less than they could "working for the man"; others go bankrupt when a new VC competitor suddenly gets better by enough to take your customers.
There is no right answer. VC money sometimes is the best answer - but many people who reaching for VC money when their better long term answer would be to grow slow.
I'm not saying profit isn't a factor, but a lot of these founders are five year founders, they are using the company as a means to their end. Basically I'm criticizing short sightedness and what it does to our economy. That's why I've turned against the stock market. The high liquidity means you are beholden to thousands of people who view your company as a roulette wheel amongst thousands, who want immediate gains and have no stomach for any losses. And many of the founders are the same people wearing a different hat.
I do agree with your overall criticism of short-sightedness and the short term incentives of VC and the stock market, etc.
But the people involved are not quite as binary as you lay out in the quote above. You can't discount the group of people who really do start out as true believers and who become seduced/deceived by VCs. Some of these VC types are real vultures. They'll convince the founder that the best way to share their vision or product with the most people and do the most good for the world is to let the VC guys use their capital to scale up and expand the reach of the product, etc. The money surely helps to lower one's skepticism/cynicism, but I can imagine that it must be very hard to say no to getting your dream project out to millions of people.
This sounds a lot like Warren Buffett's opinion of stocks. The Berkshire Hathaway Class A stocks are 780k each because he wanted people to act like investors, not speculators.
Obviously not all of these are founder centric things but they're all profit driven enterprises. Is it actually just not possible for a typical human to turn down excess profits and take pride in a project rather than a money machine? People seem to think these things used to be better, "no one takes pride in their work anymore", "everything is made to break", etc. What changed?
As such it is not surprise things change. You can't go from making less money than you could elsewhere to making a nice income without a lot of office time.
Of course it is common to take the above too far. There is need for office work, but often those office employees forget that it is about the real world.
The alternative here is to hire and train people to spend time in the office, rather than selling the company to someone who will do so. That has its own potential problems, for sure, but getting your soul eaten by VC is not one of them.
I do not recall the book/essay or the original author, but I recall the quote that “everybody has a price they can’t resist, find out that price…”.
If your enthusiasm product is successful and has potential to be milked, someone somewhere will figure out your price and eventually buy you out.
Most people don't have the patience for it and it's not as flashy. Morgan Housel (author of The Psychology of Money) on what a lot of people don't get about Warren Buffett:
> He's 90 years old. But if you look at the course of his life 99% of his net worth came after his 50th birthday and something like 97% came after his 65th birthday. That's just how compounding Works compounding is not something where the big Returns come in a year or in a decade. It's something that takes place over the course of a lifetime and it's important for someone like Warren Buffett to say look, he's 90 years old. He's been investing full-time since he's been 10 years old. So he's been investing for 80 years now. It's really important. Is that the Math on this is very simple. You can hypothetically say, okay if Warren Buffett did not start investing when he was 10. Let's say hypothetically he started investing when he was 25 like a normal person and let's say hypothetically he did not keep investing through age 90 like he has let's say hypothetically he retired at age 65 like a normal person and he would say he was just as successful and investor during that period that he was investing and he earned the same average annual Returns. What would his net worth be today? If you started investing at 25 and retired at 65 the answer is about Million dollars not 90 billion 12 million. So we know that 99.9% of his net worth can be tied to just the amount of time. He has been investing for that's how compounding works it is. So incredibly powerful, but it is rarely intuitive. Even if you understand the math behind compounding it's almost never to it intuitive how powerful it can be.
The hard bit is to keep taste and discipline at the forefront of design. To not let short-term thinking pollute long-term ambitions. Easier said than done.
I think Apple (very intelligently) made products where the average consumer is the enthusiast. Which is very hard to do when your company is a bunch of engineers.
> Eventually, the original enthusiasts feel left out. The product’s no longer for them.
I am immediately reminded of when Slack got rid of markdown-style inline formatting, in favor of a WYSIWYG interface, and the internet (or at least, the corner I live in) collectively (and, imo, correctly) lost its shit at them.
Since more of our culture is in online, advertising-dominated spaces -- the forces of capital have a lot of incentive to ensure smooth growth straight to the sociopath phase.
Maybe the key is just accepting the cycle of it all and ensuring there's always cool new places for creative/enthusiastic people to do their thing.
Notably, this process usually involves not creating a simplified interface that can be turned into expert mode but actively removing features, adding cues, and steering user behavior though a psychological maze to achieve desired effects.
Basically, people should understand this corporate lifecycle and stop being deluded by the opening moves in a new market that superficially appear to favor customers, individual empowerment, etc. It is a process that always ends in heartbreak because it serves investors, not the public.
It hadn't occurred to me that that might actually be exactly what's happening.
There are many reasons for products getting worse; sometimes it's because the company making it is trying to appeal to a broader base, so the original enthusiasts are no longer the target. Sometimes it's because different people are involved and they can't produce to the same level. Sometimes things don't really deteriorate, but new innovations make other things more appealing.
Most great products start out for enthusiasts and often by enthusiasts. They’re opinionated, sharp, sometimes rough, but exciting.
Then VC funding comes in, and the product has to appeal to a broader audience. Things get smoothed out and the metrics rule decisions.
Eventually, the original enthusiasts feel left out. The product’s no longer for them.
So a new product comes out, started again by enthusiasts for enthusiasts. And the cycle repeats - unless someone chooses to grow slowly and sustainably, without raising, and stays focused on the niche.