[fullarr]

Big Tech needs a reckoning.

They are stagnant because they outsource almost all real R&D to startups they can buy only after they've done the hard work of proving success

I know it's not a monopoly per se, but it's anti-competitive and there's too many walled gardens

[Mountain_Skies]

Pushing these companies to return money to their shareholders instead of keeping it in huge war chests used for buying up any potential competitors would be a good first step. Maybe something along the lines of "any company whose average market cap over the course of a fiscal year exceeds 1% of GDP is automatically broken up". Companies that don't want to be split into pieces would need to find ways to reduce their market cap, one of the quickest being sending dividends to shareholders, who could then invest that money into other parts of the economy or even other potential competitors.

[goodbyesf]

> Pushing these companies to return money to their shareholders instead of keeping it in huge war chests used for buying up any potential competitors would be a good first step.

Companies already do that with dividend payouts or share buyouts. Also, the shareholders control these companies. If they wanted the profits returned to then, they would vote for it.

> Maybe something along the lines of "any company whose average market cap over the course of a fiscal year exceeds 1% of GDP is automatically broken up".

I prefer over 33% market share. I think every market/industry should have at least 3 players. Any company that goes over 33% market share for X period of time gets broken apart.

> Companies that don't want to be split into pieces would need to find ways to reduce their market cap, one of the quickest being sending dividends to shareholders

Not necessarily. There are companies that don't have a profit or cash on hand with huge market caps. Amazon notoriously made no profit for decades. I think enterprise value is what you are looking for.

[fullarr]

It would be easier to limit companies to fewer than 200 employees

Edit: just a passing thought, I don't advocate for any of these ideas. Just complaining, I have no answers

[mensetmanusman]

Would need a world government to enforce, else China would dominate with huge firms.

[xyzelement]

How many people do you think are involved in creating the phone or computer you are writing this on?

[fullarr]

That's not an excuse to continue

I'm not even anti-corporation, but to pretend everything is fine seems silly

[xyzelement]

I find this "I don't feel good about X, so I am going to propose abolishing X without realizing all the consequences of that" vibe silly and dangerous. From my car to my computer to the clothes I wear, to the medical equipment for my kids' births, etc - everything was produced, sourced, and sold, by a fairly large organization that has optimized for delivering that thing to me. Both the necessities and the comforts of my life are powered by this - and same with you unless you're pretty much living off the land.

If you don't like Amazon having your data, or whatever your issue is, don't use Amazon.

[fullarr]

I literally said I'm not in support of my own dumb idea

I know things are more complicated

You, however, need a mirror. Everything you just said is a wonderful display of willful ignorance. Your head in the sand does not protect you from the world

Big Tech, in 2023, is effectively a governmental body. I mean all 7 (or whatever) of the largest companies. They operate in a wildly anti-competitive and anti-free-market way, rivaling even the Railroad tycoons of a bygone era.

I'm not anti-corporation, but there needs to be some effort put into correcting this. It's not going to fix itself.

Our country would be a lot better off with a lot of small businesses rather than a few gigantic businesses.

[nonameiguess]

Fine if those investors put the proceeds into startups or their own R&D. It has no effect if those investors are largely giant institutions, pension funds, and university endowments that automatically reinvest buybacks and dividends into the same blue chips. That is just giving brokerages an automated way to passively skim profits. They get to just sit on both sides of the finish line with their hands out while money runs laps.

[nickpp]

Many other countries would love if the US would break their Crown Jewels. The value they create is incredible, the whole market moves with them and USA owns the great majority.

[fullarr]

I don't care what the rest of the world thinks or wants

[BeFlatXIII]

Value created for whom is the real question.

[nickpp]

For the customers in the first place. Then for the society through the advantages brought by those products/services. Finally for its investors - which may as well be us with how easy is to buy stocks nowadays.

[kypro]

The thing is half of those startups wouldn't even exist if it wasn't for big tech acquisitions.

The fact that a startup without a viable business model can still have a $1b+ exit simply for having good tech is part of the reason why startups attract so much capital and can afford to be innovative.

I guess just be careful what you wish for. It can be anti-competitive, but it's also in part what's driven a lot of recent innovation.

[zeteo]

Do the big companies really use and develop the acquired technology though? It seems like most acquisitions end up being shut down and/or crappified within a few years.

[Clubber]

Sometimes they do, sometimes they just buy companies to eliminate competition or future competition. Sometimes it's some of A, some of B. It really depends.

[JohnFen]

While innovation is very important, I think that there is an unhealthy obsession with it. That obsession has a great deal of harmful effects and is a part of why people are increasingly holding tech in a dim light. The extreme focus on innovation leads to companies being abusive. Being abusive is a thing that has become normalized in the tech industry.

[ejb999]

largely true of pharma companies as well - they are largely big marketing organizations, where most of the real R&D is done by small startups that can be purchased when necessary.

[fullarr]

It feels like part of it is a cultural issue. People in the startup space largely seem uninterested in starting companies they will run their whole life

They just want the fun of experimentation and a payday

And like that's fine whatever, live your life, but it's creating a really crappy feedback loop of monopolization and buy outs

[marssaxman]

Different stages of the corporate life cycle require different skills and attract people with different temperaments; someone who launches a startup is not necessarily going to be great at running it for their whole life, nor feel fulfilled by doing so.

I prefer to work for startups whether they yield a "payday" or not - they usually don't - because huge organizations and complex bureaucracies leave me feeling miserable and demotivated.

[nickpp]

Any single Nx buyout results in N additional startups being funded. This is how VC culture operates and grows. It’s one of the main ingredients that build Silicon Valley’s success. Other countries are desperate to copy this model.

[fullarr]

I'm not arguing that it doesn't work and create a feedback loop

I'm arguing it's destructive long-term by creating a Goliath no one can compete with

Or several Goliaths in this case

Consolidation leads to stagnation

[nickpp]

Goliaths were and will always be around. But as long as there is an unregulated, free market - there will always be startups competing. It’s not easy, but it’s doable through innovation and creativity. The Goliaths are always more conservative, slower and less agile.

[JohnFen]

In the absence of regulation, goliaths will inevitably become monopolies and startups have no real chance to compete. The best a startup could be is to hope to be bought by the goliath.

[gmerc]

That’s libertarian religious scripture that needs to be backed up by solid facts.

[throw0101c]

> where most of the real R&D is done by small startups that can be purchased when necessary.

Or by governments.

[xyzelement]

Maybe that’s fine? A company that can do cutting edge research and a company that can manufacture and market at scale don’t have to be the same company.

[sparrowInHand]

There is a invisible incentive filter though- nobody will create a startup that is not worth buying for a large company - or whos product would cannibalize somebody elses product in the oligopoly.

[xyzelement]

I am not sure that's true (is it?) but more so, don't see how that follows from Pharma's alleged focus on acquisition. Can you give me an example where in a different world something good would happen that isn't happening now and why? I am not trying to be difficult just genuine don't see it yet.

[rustymonday]

You're right. More and more pharmaceutical manufacturing is contracted out to CDMOs. So one day big pharma might only do marketing.

[tnecniv]

This has a practical aspect that is different from software though. Bringing a drug to market requires a huge amount of capital and very specialized manufacturing. It’s very difficult for a small company to do that.

I’m not saying it’s a good system necessarily, but it’s a big factor worth acknowledging and different from a tech start up.

[georgeplusplus]

How do you expect more competition when most people in tech support more government regulation that inhibits smaller firms to compete?

Serious question.

[fullarr]

I don't expect anything to improve at all, TBH

I would like to see the government break up a lot of these mega corporations, but it's not a great solution

Our global economy just means overseas companies will buy them, or they will move offshore and compete where we can enforce anything

I don't have any answers, but I think we can all recognize something's not working here

[georgeplusplus]

I think you're absolutely right there's something extremely wrong going on.

My point was the people who supported the policies that got us into this mess need to recognize that the solutions they want don't exist with what they supported in the past. So sacrifices need to be made.

[dartos]

More government regulation doesn’t automatically mean it’s harder for small companies to compete.

It depends on the regulation.

[georgeplusplus]

To regulate something is to restrict it by very definition. If something is less accessible how exactly does that make it easier for smaller companies to compete and navigate the new regulations?

[dartos]

You can have regulations only apply to companies that operate in multiple states or countries, that are based on cash-on-hand, number of employees, amount of revenue, etc.

Not every rule need apply to every business.

[nickpp]

Regulation is always favoring the incumbent. Always. The mere act of acknowledging, studying and respecting regulation (even if favorable) is a discouraging factor for a beginner founder.

[dartos]

I think if studying the rules of running a business is enough work to discourage you from founding a business, then it’s probably not the right path for you anyway.

[nickpp]

Who would you rather have building businesses? Those good at creating, innovating and leading? Or those good at studying and following rules?

“Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can't do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.”

― Steve Jobs

[1vuio0pswjnm7]

One has to go back decades to a time before this sort of stifling M&A activity began. Looking at the innovation that occurred in the era before zero interest rates and so-called "Big Tech", it blows away what people call "innovation" during the period of "tech startups" and mega-sized websites.