[cjblomqvist]

There is an alternative to "wasting" money to give a second gold vein. You can just do the cash cow thing and then die. That's a totally reasonable. If TomTom don't think they can use the money better than other investment alternatives (that their investors have), then they shouldn't.

Of course, politics and personal interests. But sometimes it's just better to allocate resources to something where they're better utilized.

[serial_dev]

When I was reading the comment, I thought the same: why don't companies just accept that they have one good project, focus on it 100%, stay good at it, and when the market dies, the company could die with it. There is no shame in milking one product for 20 years, providing a living to hundreds/thousands, then just scale back to maintenance and eventually close things down.

It doesn't really happen in practice, because no "visionary CEO" will say "we couldn't come up with a better idea than what we are doing now, so let's just call it a day in terms of exploring other ideas, and focus on this one product".

My current company is a retail company with both lots of physical locations and web shop/mobile app. We always try to come up with features that users can use in the physical stores, and those features get practically zero traction. Nobody is willing to say that the people who go to the stores, in a big percentage, won't use our apps, and the people who use the apps/web shop don't care about the physical stores. Every product person wants to combine these two, and I don't understand why.

(I guess, that's why I'm not in charge of business decisions :))

[nradov]

That is exactly the business model for some private equity firms (corporate raiders). They identify undervalued companies with strong revenue and significant assets where incompetent management is wasting resources and buy the company. Then they stop investing in growth, cut expenses to the bone, borrow against the assets, issue huge dividends to shareholders, and allow the company to gradually die. There's nothing really wrong with this approach and it probably helps increase overall economic growth through better capital allocation. But it can be a rough ride for employees caught in the process.

[908B64B197]

> But it can be a rough ride for employees caught in the process.

Or an opportunity. They should see the private equity firms coming in as a signal it's time to jump ship and not liquidate their stocks (actually, renegotiate your ESPP while you look out for the next thing!).

[scotty79]

> why don't companies just accept that they have one good project, focus on it 100%, stay good at it, and when the market dies, the company could die with it.

Because corporations are organisations (that develop some bureaucracy) and the main existential purpose of every bureaucratic organisation is to survive and grow. No corporation will just voluntarily die I think. First it will be sold, reorganized, reimagined, reinvented, downscaled, pivoted and all that good stuff.

[enkid]

Has a CEO ever been hired to do this? I just don't see a business ever saying don't invest in us because there are better alternatives.

[jackweirdy]

Some see paying out dividends as saying “you can do more with this money than we can right now”

[MichaelBurge]

REITs are required by tax law to pay out 90%+ of their income, and everyone invests in them specifically for the dividend.

If the stock price gets too high, they always dilute it by issuing new shares to raise money for new projects. So you're never expecting lots of appreciation.

There's hundreds of them, and also many private REITs that are unlisted with the same fundamental idea.

Oil, utilities, REITs, small business lenders, etc. all have investors expecting management to just sit there, don't kill the golden goose, and pay regular dividends.

[mason55]

That's how companies used to work. You get some people & capital together to accomplish something and once you've accomplished it you shut down and distribute the company assets.

[__alexs]

They are called liquidators.

[speed_spread]

That Nokia guy when they "sold" to Microsoft. He was the captain put in place to run the ship aground.