Higher interest rates, less vc money, have to actually start being profitable
this post was submitted on 16 Jun 2023
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Running out of VC dollars, now they gotta actually make a profit.
Public companies are legally required to always do their best to grow year over year. Eventually these companies get so large they can't realistically get more market share so they have to figure out how to make more money from their users. This leads to them squeezing users for cash in the hunt for short term gains because they've already realistically capped out on how much money they can make per year. It's a dumb system that can't work in the long term.
I know the system prevents it but they should just be happy with making a steady amount of income each year
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I don't know honestly, greed probably. But it's such a shame. It seems like the internet as a whole is heading in a horrible direction, and not enough people care about it for there to be something done about it.
The climate is heading in a horrible direction, and not enough people care. Politics are heading in a horrible direction, and you know what? Not enough people care!
Sorry, the last 4 years has made me very cynical. And I'm in a particularly blue mood today.
dude i feel that. its just lame and hard to grip with
its like i wish almost that i didnt care
But here we are dipping our toes in the fediverse, a bit early for the non tech savvy people but from my point of view we are currently proving that monolithic corps are no longer needed. They are convenient, but not alfa-omega.
A lot of these companies have never been profitable and have been running on VC money on speculation alone until they reach critical mass and can turn on the monetization streams.
Because easy money from a decade of low interest rates is disappearing.
Because of capitalism, no seriously these decisions are based on money and growth. But both of these things are relatively finite. You can't keep have exponential growth year after year. Eventually you will plateau but there isnt a mechanism in capitalism to accept that. So companies start forcing monetary gain.
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What were the bad decisions discord is making? Im out of the loop
I reckon there are two factors at work here, the profit imperative and enshitification. The profit imperative relates to how corporations have to make exponential profits every single year (and as we all should know you can't have exponential growth in a finite system.)
And enshitification is a result of the profit imperative, with all the corporations trying vainly to keep the profits rolling in they have to cut quality, be it through replacing ingrediants with inferior ones or pumping in the sugar so it's harder to taste the wood chips, killing third party alternatives for viewing your site to keep all the ad revenue to yourself, putting out unfinished products and charging top dollar while treating your users as unpaid testers.
Or any other of the million shitty practices corporations can think up to keep the economic perpetual motion going, it's all going the same way in the end though because you can't get blood from a stone and as a great man once said “You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.”
Nobody said that companies have to make exponential profits, that's why non social media companies are doing ok.
The reason social media companies are failing is because investors are tired of throwing cash away and need them to turn a profit
I think the main problem with these companies and the startup/tech bro culture (mostly in the US) is that they are growing for the sake of just growth itself, because they want to get their own. The original idea is to grow as big as they can, IPO, then sell it off. They weren't designing things to be profitable from the start. So eventually they all reach a stage where they are hemorrhaging money too much, and that is where all the enshittification happens (investors come in, they try to make it a real business now, but it wasn't really feasible to be a business to begin with).
Well said. I run a branding and marketing biz and had a customer talking about seeing how they could implement this strategy. I said it nicely, but explained it would ruin everything they’ve worked so hard to build. Go buy some lotto tickets instead and keep your hard work in tact.
a lot of people have already basically made this point, but ad revenue isn't really good enough to make massive massive tech platforms profitable, and there's only so much VC money they can all burn. we saw the first stage a few months ago when basically every major tech company had massive layoffs, now all these companies are trying to become profitable all at once
Companies in general are just designed to make more profit, that‘s it. All their decisions make sense from a business perspective, they are just shitty for us from a human perspective. This is why we need decentralised platforms which aren‘t inherently profit seeking.
Funny also how every time someone criticises capitalism someone shows up attributing all technological advances to capitalism. No. It‘s the people, under any economic system there will be inventions, it is small minded to think people only innovate or work out of greed, if that were so the entire open source just wouldn‘t exist and volunteering wouldn‘t exist.
I think it has something to do with fear of an upcoming recession, platforms need to prove to their shareholders that they can still maintain profitability even in the face of economic downturn. Keep in mind the US hasn't experienced a real recession since the tech boom, which may explain why all this money grubbing is so severe and sudden.
Start making alternatives, open source alternatives.