I blame the stock market pressure towards growth. The stock market rewards growth at the expense of everything else. It's like a kid pinching his arm to blow up a mosquito that was biting him- it's forced to grow and grow and grow until it pops. It's no longer acceptable to simply run a profitable business with happy employees and customers.
It creates a push towards constant acceleration in all things- shorter release cycles, more product categories, etc. This supplies the continuous growth that shareholders demand right up until the point where it kills the host.
Also, "success hides failure". If you're a titanically successful corporation, any internal argument along the lines of "we shouldn't do X anymore, we should do Y instead" can be shot down with "well, look at how successful we were while we were doing X! X must not be so bad after all." It degrades an organization's ability to be reflective and self-critical.
These are problems for all successful companies, which become bigger and bigger problems with increasing success.
> Also, "success hides failure". If you're a titanically successful corporation, any internal argument along the lines of "we shouldn't do X anymore, we should do Y instead" can be shot down with "well, look at how successful we were while we were doing X! X must not be so bad after all." It degrades an organization's ability to be reflective and self-critical.
Pretty simple solution...if you don't want to be beholden to external shareholders, don't go public.
If you're pre IPO, fund your company through debt, which is extremely cheap at the moment with interest rates at historical lows, or sane, sustainable equity rounds through investors who you know and trust and are in it for the long haul.
If you're post IPO, pull a Dell and exit the public markets so you can refocus on core business ideas and long-term growth rather than spending time bickering with Carl Icahn and fighting market sentiment.
Unfortunately "pulling a Dell" is only feasible years after a company's market cap has completely tanked, and still requires a ton of capital plus no perceived value to anyone outside the company (otherwise someone else would buy it long before the company could buy itself).
The circumstances were ideal for Dell, and even then look at how incredibly long and tortuous that process was. It almost didn't happen, it's almost miraculous that it finally did. Good for them though, I wish it were much easier for companies to go private again.
> I blame the stock market pressure towards growth
This is because almost everyone's retirement fund/401k/IRA is now directly tied to the stock market in one form or another. There are no more pensions, so people need growth in order to retire and live a reasonable life in your last years.
There are still pensions and they are also tied to the stock market. Pension funds also have greater influence over CEOs and they need growth every quarter because they are so underfunded (i.e. most pension funds are capitalized based on extremely unreasonable expectations of stock market growth).
So, the reality is that pension funds exert a much greater pressure on CEOs to create short term gains than individual investors who -- incongruously -- take a longer view.
Investors simply do not bid up stock prices for short term gains at the expense of long term. Stock prices are always based on long term expected returns.
It happens that CEOs manipulate the business to show a short term profit at the expense of long term, but if investors find out about it the stock will promptly tank to reflect the long view.
A common related idea is that CEOs gut businesses to satisfy Wall Street. This makes no fiscal sense at all. It can very well be true that Wall Street and CEOs often have conflicting and/or mistaken ideas about which way a business should turn, but it is never about gutting a business.
And yes, if a business can make more money by being "parted out" than as a business, then parting it out makes sense.
Yes. Always were.
It's economics literacy that seems to be absent.
The people that are nostalgic for defined benefit pensions never seem to remember the corrupt Teamsters' pension funds. They only remember how their Fidelity 401k did in 2008.
There's been much talk about the "financialization of everything"[1], but how did it come to this? What change in laws, what shift in culture, produced this growth at all costs mentality? HFT? The Reagan Revolution? Moving manufacturing offshore?
I suspect also the end of Bretton-Woods, and western counties moving from dominantly Keynesian economic policy to dominantly Monetarism/Neoliberalism (which is responisble for your last two points).
I suggest the following article [1] for more on neoliberalism, as well as Philip Pilkington's series of articles on the origin on neoliberalism.
Sometime in the 1970s or 1980s, companies started optimizing for maximum shareholder value; everything else be damned. HFT and offshoring manufacturing were deliberate effects of it.
I don't think it's the stock market. If anything, it's the CEO not focusing on making products that make people's lives better and instead focusing on what everyone else in SV (and the tech industry in general) is making.
And I am confused what Apple could be doing that the tech industry isn't already doing. There aren't many raw innovation areas to get into now. It's all about execution and innovation at the micro level.
For me Apple's foray into health e.g. Apple Watch, HealthKit, ResearchKit as well as their pretty amazing stance on encryption and privacy is absolutely about making people's lives better. It sure as hell isn't particularly profitable.
It creates a push towards constant acceleration in all things- shorter release cycles, more product categories, etc. This supplies the continuous growth that shareholders demand right up until the point where it kills the host.
Also, "success hides failure". If you're a titanically successful corporation, any internal argument along the lines of "we shouldn't do X anymore, we should do Y instead" can be shot down with "well, look at how successful we were while we were doing X! X must not be so bad after all." It degrades an organization's ability to be reflective and self-critical.
These are problems for all successful companies, which become bigger and bigger problems with increasing success.