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15 years ago I bought a ride-on lawn mower that gave me 12 years of service, but was getting a bit long in the tooth.

I decided to buy the next model up from the same company, not knowing in the mean time it had been bought by a PE company and the quality had gone to shit. The mower is bigger, but the engine is smaller and they are notorious for blowing a head gasket any time the mowing blades stall out.

I was thinking of starting a web register of all PE PortCos (private equity portfolio companies) so people would know to treat the products with caution as the main way of reducing costs seems to be a) sacking people and b) cutting corners on product quality.

I have an old cohort of co-workers who I went through the PE experience with and we pretty much use PE ownership of a company as a heuristic to avoid buying their products. Duracell batteries would be an example. A list would probably be helpful but depressingly long.

Which company is this? I’ve heard this referred to as “reputation mining”.

You buy a company with a good reputation, cut quality drastically, and profit for the decade or so it takes until everyone realizes the brand sucks now.

It is all over the place. The worst part is when you realize reputation is always a trailing indicator the only rational action seems to be to buy the cheapest one and use the saved money for the replacement. Basically, optimize your life around rapid disposal and replacement which makes extra trash and takes extra time versus just having a good quality item you can rely on.

My mower recently started to rust out and I dread buying a replacement. Aside from cheaply replacing poorly designed wheels fairly often I was 100% with this mower. But I can't buy it again because the march forward with redesigns means it is no longer made. Is the new one better? General life experience says, probably not.

I had this conversation with someone online. "X makes great cars! I bought one 15 years ago and it's been rock solid!" Yeah, well 15 years is a long time. The car you buy that was made this year could be a piece of crap. Who even knows? No one will know for at least the next 5 years. You just have to roll the dice and hope they care about the reputation - and check if the badge has been sold.

I also consider a few products disposable like that, but it's generally cheaper things. Non-stick pans are one of those, they work until they don't and I'm not going to baby them.

I have been considering for years to make something similar. A site that offers a company search and it will tell you how many PE tendrils are wrapped up in it. The data is out there. Anyone else want to join in? Is there an API we should be considering?

it's interesting how your reluctance in naming names in this instance actually ensures PE folks win.

I think the issue could be rooted in recent monetary policy rather than an inhrenent feature of the market itself.

Artificially low interest rate environments lead to a lot of money in the hands of investors, which due to inflation slowly loses purchasing power over time. However, with large reserves, they can easily afford to prop up a business model which persistantly spends more money on bringing "free" features to user while charging very little. Those businesses obviously outcompete any business which do not recieve such investment.

However, as time goes on, those investments must eventually earn a return. Switching from a model which loses money every year to one which must profit every year is invariably going to affect the quality of the product. Especially in an environment where directly charging customers for your service would be a death sentence.

In the absense of such cheap credit, however, a truly competitive environment could potentially emerge, where businesses must be sustanably profitable from the ground up. Esentially this would mean the last 15 or so years has been wasted time in pursuit of this goal, as false monetary signals were steering us in completely the wrong direction.

Some of todays tech companies may survive the transition, but I believe that most will eventually be replaced by completely new ones. Unless we go back to a policy of lowering interest rates to near (or even below) 0%.

I remain infuriated that we had the confluence of:

- huge amount of very cheap money

- widespread availability of highly educated technologists

- knowledge of the climate model

.. and instead "collectively" ended up funding giveaway services to users and inflating the SF housing market rather than doing the climate Manhattan project.

(High interest rates are bad for renewables, because buying a solar panel is effectively buying 20-30 years of electricity upfront, and therefore hugely dependent on cost of capital and discount rates)

Yeah. Climate change would be dirt cheap to solve if we actually bothered to do it. The famously expensive Georgia nuclear plant cost less than 75% of what Twitter did. Juicero flushed $120M straight down the toilet.

We would expect electricity prices to also go up faster with higher interest rates so it should roughly cancel out.

Just don't understand how one could be convinced these days of the fundamental conceit that even a properly profitable company is necessarily going to provide good things for people downstream, or for society in general. What is the argument for that in general again?

Because to me, if your not Twitter, your Wal Mart or Raytheon or BoA. If your not shittifying a platform you are pushing out small businesses from every town, price gouging government contracts for missiles, fooling elderly people with complicated financial instruments.

I just can't really put together any argument at all, if am being honest, to justify the idea that companies with a self interest in profit will reliably help people or the world. It just does not at all feel rational, its like everyone in the world is dreaming.

  > Just don't understand how one could be convinced these days of the fundamental conceit that even a properly profitable company is necessarily going to provide good things for people downstream, or for society in general.

if one has worked in a number of business it should become fairly obvious that good products and good revenue are orthogonal phenomena (sometimes they align of course)

  > What is the argument for that in general again?

i think the general conceit is that bad or good product, someone is paying and they are getting some kind of value so who is anyone to say its good or bad for society?

  > the idea that companies with a self interest in profit will reliably help people or the world

wasn't this idea put forth strongly by milton freidman and the chicago school - "greed is good" [1] - because more economic activity rises all...? i have to admit intuitively it sounds good even if its probably b.s [2]

  > It just does not at all feel rational, its like everyone in the world is dreaming.

well, at least some economists anyways....

[1] https://www.youtube.com/watch?v=RWsx1X8PV_A

[2] https://www.nytimes.com/2020/09/13/business/dealbook/milton-...

Let's remember that Adam Smith was against the idea of the joint stock company, a company where the shareholders and managers are different people.

He thought that smaller, owner operated businesses would outcompete joint stock companies, primarily because the incentives between owners and managers were aligned.

Managers managing other people's money will make worse decisions over the long term than managers managing their own money.

That was his theory back in 1776, things didn't turn out that way obviously.

  > That was his theory back in 1776, things didn't turn out that way obviously

well, i guess its because join-stock companies were able to raise more capital faster?

A guy named Karl came to the exact same conclusions, in 1867.

I mean, you say "companies" but really you mean "people" because people run companies. You can't, or shouldn't, abstract away the people ultimately making decisions if you're trying to reason about this stuff.

And people can make decisions, even the ones who run companies, to balance profits with contributing to a greater good. But they choose not to.

So the people who are running these companies are choosing to prioritize profits at all costs. Some of this is because the people who operate the financial markets tell them they will be punished if they don't, but obviously there's also some agency on the part of the company leadership as well.

We need a renaissance where voters wake up and remember that companies exist at the behest of the people. A business has no god-given or natural right to exist. They apply to their state with incorporation documents, and the state (in other words, the people) decides whether or not they should exist by granting them a business charter / license.

Companies are allowed to exist because they provide some common good, in exchange for us allowing them to profit and have limited liability. I think companies have forgotten this bargain, and feel they simply have the right to exist and that their only duty is to provide profit to shareholders.

The people should hold companies to a high standard, and demand that they also serve the public good in addition to serving their shareholders. And we should revoke companies' existence when they fail to uphold their side of the bargain. When was the last time that happened to a major company--that their business charter was revoked by the government for wrongdoing? We've gotten so used to simping for companies and not holding them accountable that they now strongly believe their only obligation is to their shareholders and financial markets.

Books have been written on the subject, so an HN comment isn't going to do it. But if you consider that anyone making a mutually consentual transaction is doing it because they value the traded good more than what they're trading, it's not hard to see how a free market can provide good things for people and society in general as resources flow to where they are most valued. Of course there's nuance here (such as assuming purely rational actors, addressing realites around information asymmetry, and that macroeconomics is different than micro) but that's part of the low-level foundation.

I'm not a big fan of capitalism as it can be an utterly cruel mistress, but given the unfortunate realities of human nature I can't think of a system that is on the whole better. As long as there is scarcity, there will be something used as a basis for rationing (who gets what, and why). If it's not who is willing to pay the most, then it's who has the most powerful friends or the biggest army, or something else. There are problems with under-checked capitalism, and there are problems with over-checked capitalism. We'll never get it just right because humans aren't smart enough to, but perhaps we'll achieve post-scarcity at some point. One can hope.

I don't think I can do justice to the entire topic on here so I will just point to this small part of your reply:

> pushing out small businesses from every town

Those small businesses are also run on a for profit basis and are market driven. If there is something causing them to fail despite providing a better quality of service then perhaps we are still looking at market distortions rather than a fundamental failing of capitalism.

>What is the argument for that in general again?

Free-market types used to have some assumptions about how free markets are expected to work, then they would derive the result that a free market yields a net benefit to society from those assumptions.

Now it is glaringly obvious that a free market can cause a net loss to society, but they still need to believe free markets are good. So they ignore the evidence, and instead of deriving the result from assumptions, they treat it as an axiom instead.

Isn’t the whole argument in this thread that the government meddled in the economy by printing tons of money that then was used for questionable investments? How is that “free market”?

IME 80% of criticisms of “free market” is actually a criticism of government policy (and then the same critics think that more of those policies are called for!)

Government regulation and the Fed will continue to exist in some form, at least to some small degree, so you will always be able to claim markets weren't "free" enough to properly implement a free market system. But if that's true, then it's moot; if a free-market system requires absolute purity from government to perform as intended, then it's worthless, because that will never happen. In other words, its proponents admit it's a fantasy that will only exist in their heads. As such, I have no reason to care about it or about how great some people think it is.

Fortunately, most economists already agree that market failures exist, and that free-market economics is bunk.

Or, blame meddlesome government regulation as the problem, blocking a free market and instead having winners and losers chosen by the state. It’s an effective argument because it’s got some truth to it.

IMO: Consumers will adapt to the reality, as humans always do. Once people adjust to the fact that popular brands are generally strip-mined for profit, brand loyalty will drop and keep dropping, consumers will become warier of lock-in, and the enshittification playbook will be less and less effective.

There's always going to be room for an un/poorly regulated gold rush somewhere somehow. If we drop the loyalty to major brands they will open small proxy ones and flood the market. Just an example.

I think there's a cultural problem. Companies are made of people not papers. It's people that are pushing for profits no matter what. And as lots of money with no value get made, the value of the money drops, so you need more of it. So people start thinking in terms like "I have a family to raise so fuck principles", "If I don't do it someone else will" and so on.

I'm not talking about major figures, people always focus on those. I'm talking about regular people who have no problem working for an online casino for example when they know a significant portion of their customers are underage.

So we are adapting, but in a downward spiral. That's how I see it.

> If we drop the loyalty to major brands they will open small proxy ones and flood the market. Just an example.

The point is those small brands won't be trusted. People will make more effort to check reviews, or demand stricter warranty laws, or the like.

The reviews are already useless. We had plenty of discussion here about that, won't go into details. Again, it was just an example, don't get stuck on it, there are a million ways to fool the public because:

1. There is just too much information to obtain to make an informed decision. There is not enough time for a regular customer to dig into all that. We know these things because we are insiders. That's why you need regulation bodies made of experts to pass legislation to protect the customer.

2. The information gatekeepers are the same who are pushing the enshittification. Where are you going to search for better service? On Google's search engine. Who processes the reviews and decides which to show, which to flag? Again, Google, Amazon, etc. You can not rely on their tools to help you inform about their service. This is why we need regulations about search results.

In conclusion we can not simply rely on customers adapting.

Build consumer trust and profit from it by deceptive betrayal. People no longer trust brands like they used to. Instead people rely on reviews, but trust in that system is eroding due to betrayal as well.

  > consumers will become warier of lock-in

i hope you are right, but i'm reminded of the saying "there's a sucker born every minute"

It is some sort of scam I think. The shareholders don't have the detailed knowledge and insight into the everyday work so the managerial class can squeeze out a dime for a dollar of some hard to measure asset like consumer trust or whatever.

Also, I got this feeling bigger shareholders might think they are smart and part of the scam and that they will jump ship (sell the stock) before smaller shareholders notice.

I guess e.g. Ben and Jerries would be all vanilla ice cream at this point of they were run in this way. You could always decrease the amount of nuts and fillings with 1% more without anyone noticing ...

> bigger shareholders might think they are smart and part of the scam and that they will jump ship (sell the stock) before smaller shareholders notice

Absolutely. Decades of “you can’t beat the market” propaganda has created a large class of “investors” whose only strategy is buy all of the stocks and hope for the best.

"It is hard to beat the market without insider info" is not as catchy.

I’ve also pondered over this recently. Many social media companies have incentives that are unaligned with their platform users’ best interests. For example, creating more engagement through polarizing or negative content, trying to maximize the time people are glued to screens to eke out ad money, the turning around to sell or exploit personal data.

Frustratingly, they almost have a legal fiduciary duty to behave this way as currently structured, as their only mandate is to increase value for shareholders. Negative externalities on users, employees, or society at large are not relevant to decision making at all.

The conclusion I found is that the only ethical solution would be to create a cooperative public benefit corporation. With that structure, the company has a mandate to do right by their customers, their employees, and society as a whole in measurable ways.

I have somewhat blogged about this, though I realize the idea may be incomplete.

https://dynamorando.pages.dev/blog/the-public-web/

I welcome any tactful feedback. Also I have no idea how to initiate such an idea.

This only happens when the users are the product or its a marketplace. Most business models dont suffer from shittification. But VCs love investing in the ones that do.

I would say the opposite. Consumers frequently reward the business models that do whatever it takes to lower prices in the short term, often sacrificing the long term.

It is a constant struggle to convince people that your higher quality product/service is worth the extra cost, and obviously, many times it is not.

But the formula for operating a successful, long term business is not as simple as “output the best quality product or service you can, and you will be rewarded”. It is more like “output the best quality product or service you can relative to prices of competing sellers, and at prices your clientele can afford”.

Which may or may not include sellers that have access to much cheaper money (VC, bigger companies with other revenue streams, etc), or sellers operating in different jurisdictions with lower costs.

It’s not that consumers don’t reward quality. It’s that more consumers reward lower prices, and once outside money is involved you have to chase growth instead of steady profits.

Family owned businesses are often able to maintain very high quality. They’ll just never make enough to satisfy people looking for huge returns, which is nearly anyone who doesn’t have some deeper connection to the company.

Nah it happens to all public companies (see hasbro with magic/d&d) even when users are not the product.

It happens when nobody wants to be the first to show flagging growth and investor expectations have not reset yet after a period of growth.

It’s just easier in tech to manufacture growth metrics you cant get checked on

Sure, but in those industries the users leave, the company suffers and the executives get fired. VC are attracted to moaty business models where users cant leave.

> the executives get fired

By fired, do you mean receive multimillion dollar payouts and jobs from their friends at another place where they can do it all again?

d&d has weak network effects. wotc overestimated the effect though

In Canada the once beloved brick and mortar retailer Mountain Equipment Coop shittified itself straight to (pandemic) bankruptcy hard and fast not long after the Harvard MBA types got their hands on the business. MEC was late to the party. Much of mall retail had already shittified itself ages ago.

It seems to be happening everywhere. Give the worst product you can get away with while using marketing to get people to keep upgrading before they realize how bad the product is. While progressively lowering the quality of the product each year. "Planned Obsolescence" is the physical product equivalent of digital enshittification.

For an example of literal enshittification see water companies in England. Not discharging raw sewage into rivers and the sea would interfere with dividends to the PE owners.

I think Apple managed to escape this VC trap by sheer excellence.

Apple's been around for a long time, and if anything I would attribute it to the force of will of Steve Jobs. By the time he was dead, Apple had such a huge cash pile that they're no longer beholden to investors in quite the same way. They now only have to worry about ordinary market complaints from shareholders.

(don't forget the Wilderness Years, Apple came close to death)

also the company that stays small will get clobbered by the vc backed competitor. they will build more features, have more marketing and lower cost during the growth phase.