[capybara_2020]

Alternate argument. Maybe these kinds of investments are bad and we would have more realistic companies if founders and investors focused on profitable companies and making sure their customers were actually happy rather than trying to look appealing to some behemoth that will buy them down the line or other investors.

[kypro]

> we would have more realistic companies

I assume by "realistic" you mean companies that prioritise profitably?

I don't hold a strong opinion on this, but the way I see this is that, yes, investors could invest in companies and demand those companies maximise profits so they can see a return on their investment as soon as possible without the need for accusation, but I genuinely don't know if most users would agree this is better for them.

To appeal to an acquirer or other investors companies most first appeal to their users and show strong user growth. So I don't buy your second point that companies prioritising profitably are somehow more focused on building a good products for their users – and if anything I'd probably argue the inverse is generally true.

I suppose if you were to push me for an opinion on this I think it's fine to let the market decide what's best. Companies can already focus on profits if they wish. And if you're right that companies that do this will have better products and keep their users happy then companies that choose to do this should take market share from big tech over time.

But to be so certain of this that you'd use regulation to enforce it thereby destroying a significant source of funding from early stage companies and the innovation those companies provide the tech sector would be a risk. Especially when I'm not even sure you're right that consumers prefer companies that focus on profitability.

[skydhash]

> To appeal to an acquirer or other investors companies most first appeal to their users and show strong user growth. So I don't buy your second point that companies prioritising profitably are somehow more focused on building a good products for their users – and if anything I'd probably argue the inverse is generally true.

It’s hard to compete with free. You can’t burn millions you don’t have to present a sweet deal to users or releasing features in month. And now people have become accustomed to receive everything on the internet for free (bundled with ads).

[nmfisher]

Alternatively, blocking anticompetitive mergers will make VCs less likely to fund loss-making companies for decades, thereby creating space for healthier competition at a much earlier stage.

How many competitors died on the vine because Figma was able to offer a free tier subsidised with low interest rate VC money?

[TerrifiedMouse]

> How many competitors died on the vine because Figma was able to offer a free tier subsidised with low interest rate VC money?

Is it any different from wealthy established multinationals offering a free tier subsidized by steady profits from established (sometimes even monopolistic) product lines killing all startup offerings?

[nmfisher]

It’s probably the same, but I’m not necessarily talking about outlawing the practice itself, just the acquisition that makes the practice (eventually) profitable for investors. Large companies with monopolistic product lines shouldn’t be able to merge either.

[candiddevmike]

The worst part is, these companies outcompete and end up destroying "realistic companies" because they don't have to live hand-to-mouth.

[fakedang]

> if founders and investors focused on profitable companies and making sure their customers were actually happy rather than trying to look appealing to some behemoth that will buy them down the line or other investors.

This right here. What happened to IPOs being the endgame?

[nine_k]

Higher interest rates -> less money to invest into IPOs, I suppose. A number of zirp-times IPOs were... less than stellar investments.

[fakedang]

The shift away from IPOs was long in the making though. It's nowhere as recent as the interest rate shift.

[nine_k]

What was the reason?

[fakedang]

I'm guessing ZIRP-enabled acquisitions, made for an easier route to succeed rather than an IPO and being judged by the market on the go.

[YetAnotherNick]

> profitable companies and making sure their customers were actually happy

These two are negatively correlated. Google and reddit and other companies were awesome and very user friendly when they had investors pouring in money and they could afford loss.

All the VC hate in HN is weird given we are in a platform owned by VC.

[smallerfish]

Google not being awesome has nothing to do with VC. They could be wildly profitable while continuing to innovate on product and providing excellent customer support. Instead they're wildly profitable while their dysfunctional organization is sending their product quality to shit.