[peaton]

It seems the case that the life of a company also follows the Dark Knight quote "You either die a hero or you live long enough to see yourself become the villain." That is, when a company starts, we all invest because we want our chance to become majority stake holders in the next big monopoly destroyer. Once a company accomplishes this, it becomes a target just as the company(ies) it replaced. I'm no expert and I could be overly generalizing, but am I the only one that sees a problem with the fundamental form company growth takes today?

[techadv]

This is probably a cognitive bias obtained from reading the industry trade press.

There's a notable alternative -- you don't have a meteoric rise to giant status, but you also don't collapse. These sorts of "happy medium" companies are in the vast majority even in our industry, but they're less likely to end up on the front page of a news feed, esp. those biased toward the fast growth (startup) community.

Also, you forgot the last stage. After becoming super rich, the CEO gets inspired by something other than heading up a vilified corporation, then goes off and founds a foundation that does great humanitarian work. Now that the company is not on top and the founder is doing exclusively good stuff for humanity, no one hates either anymore :-)

edit: fixed pronouns and adjectives because it pointed ambiguously in the sentence.

[peaton]

Ah yes, I forgot about Gates. (And Elon, and a number of other such CEOs I'm sure.) Good call!

But you're definitely completely right about medium-sized companies. I had totally forgotten about that category.

[pjmorris]

Not just Gates. Rockefeller, Sloan, Carnegie, all of whom Gates is emulating. It's a grand American tradition.

[WalterBright]

Companies follow a pattern of rapid growth, dominance, senescence, then irrelevance as other companies eat their lunch.

Kodak is a prime example. So's RCA (who remembers them?). Sears. IBM. Xerox. All once considered unstoppable juggernauuts.

In fact, the conventional wisdom is that companies inevitably grow to take over the world. There are no instances of this happening - there are only cases where a company survived senescence by successfully making their competition illegal.

[fsck--off]

What about Standard Oil? Exxon Mobil is still the 3rd largest company by revenue in the world. If it was combined with another baby Standard Oil, Chevron, it would be the largest company in the world.

[WalterBright]

> What about Standard Oil?

Great question. In the biography of Rockefeller "Titan", the book notes that Standard Oil's market share was steadily declining throughout the antitrust trial, and Rockefeller was unable to stem the bleeding.

[mwfunk]

I totally agree. In the tech industry at least, stock performance seems totally driven by growth. Companies that stop growing for a few quarters are seen as failures, when maybe they just reached an equilibrium for a while.

I would think that equilibrium was fine, maybe even a good sign- it's a successful business that's humming along. But short-term investors want to see growth, so they can cash out their investment in a few months or years.

The positive aspect of all of this is that it constantly drives evolution and innovation through competition. The part that sucks is that businesses are forced to constantly grow (or waste lots of money on failed attempts to grow), until they get so big compared to their optimal size that they just stop making sense as companies and crumble under their own weight.

[dm2]

Supposedly the plan for the Amazon online store has always been to barely break even to establish their customer base, then to raise the prices of items to start making money. They started doing that last year when the price of their products started being more than competitors. The increased price of Prime was acceptable to me, but when I can go to a local store and purchase the items for cheaper, then that's the price increase that I do not want. Their algorithms determine the maximum amount of money they can make off of customers rather than basing it off of what the products actually cost, it makes sense for short-term profits, long-term profits are difficult to predict.

[jamesaguilar]

An oft-suggested plan, but I have yet to see convincing evidence that this is what they will do. I would guess given the plays that they have been making that they think they can reduce the cost of servicing orders, and make their money that way. The idea that they would achieve a monopoly and then raise prices seems silly, since the government would likely clamp down on that kind of strategy. And everything about their investments suggests that they think of themselves as a logistics company, not a monopolist.

[eclipxe]

The plan according to whom?

[dredmorbius]

Only the young die good.