91

Original take found on another forum.

"I think we're seeing the beginning of the tech bubble bursting again.

You've got the successful companies that provide a case study in tech industry profitability(Google, Amazon, Apple, etc.) which is why you've got all these venture capital firms plowing so much money into startups, left and right, because they expect that one of them will be the next Google or Amazon. Now that low interest rates have gone bye-bye, the VC firms are demanding that these startups start showing a profit. However, almost all of these startups have one of the following problems:

1.) They were never profitable and can never be profitable because the fundamental concept of what they do is thoroughly flawed
2.) The service or good they provide could be profitable, but due to being formed during a time of easy money, their current business model is incapable of being profitable, and they are too over leveraged to be able to restructure themselves into a more profitable setup
3.) They are perfectly sustainable/profitable, but their financiers expect far more return on investment than they are capable of providing

The result is the trend of "enshittification" as VC investors force unwanted changes onto these startups in the hopes of increasing revenue. This is stuff like locking previously free features behind a paywall, clogging everything with ads, cutting costs somewhere (payrolls, server space, etc) that negatively affects the user experience, raising prices, or needlessly bolting on something that nobody asked for because it's one of the only things that VC firms might still blindly throwing money at(AI).

Even the actually profitable companies are doing this shit because they are just addicted to the ridiculous growth they've enjoyed in the past."

you are viewing a single comment's thread
view the rest of the comments
[-] justhach@lemmy.world 23 points 1 year ago

3.) They are perfectly sustainable/profitable, but their financiers expect far more return on investment than they are capable of providing

This is the part that pisses me off. Its not that they're not making money, its that they're not making enough money. So, they make short sighted moves to make $100,000 bucks in the short term instead of a stable return of $10,000 in perpetuity.

This mentality will literally kill us.

[-] olrik@kbin.social 6 points 1 year ago* (last edited 1 year ago)

Yeah and then their employees have to work almost 24/7 and sleep under their desk or get evicted from their workplace.

this post was submitted on 20 Jun 2023
91 points (100.0% liked)

Reddit Migration

207 readers
2 users here now

### About Community Tracking and helping #redditmigration to Kbin and the Fediverse. Say hello to the decentralized and open future. To see latest reeddit blackout info, see here: https://reddark.untone.uk/

founded 1 year ago