No Stupid Questions

Late stage capitalism You make a business and it goes well, you make some money everyone is happy.

But with time your profits will plateau or even decline. It's natural, but businesses don't understand that it is insane to expect a company to always turn crazy profits when the product does not evolve.

Companies like apple and Microsoft don't worry as much because they are constantly evolving with new product.

Companies like Twitter, Facebook, reddit, Netflix have hit a wall where there really isn't anywhere else to go so they start making shareholder centered decisions made by people who aren't even in touch with the user base of their product.

Lets take the example of Reddit. Reddit could have kept its costs to the minimum and could have run the site with the ad revenue that came in. In fact they could have talked transparently about their opex and asked for a simple donation drive every now and then like Wikipedia. If need be, they could have removed silly GIF replies and other stuff and focused on text alone. However this would not let them become the next Facebook. That's what they wanted to be. At some point in their story was a choice to be forums 2.0 or get into a race to become a cash grab. Sadly they went for the latter.

It's the money.

US Fed has raised interest rates, destroying money for the first time in decades in an effort to stop our inflation problem

The knock on effects is that banks literally have less money to lend to companies. Some companies are affected more than others by this environment. Tech was hit hard, extremely hard.

With hundreds of thousands of layoffs, tech industry is contracting. Silicon Valley bank literally evaporated in the span of 3 days. Twitter was losing money and had to sell out. StackOverflow is losing money and is currently selling out.

In this environment, Reddit is about to launch it's long awaited IPO, the time when the public is allowed to directly buy Reddit stock and invest into the company. That's what Initial Public Offering means. If Reddit does well, Reddit will pull in lots of money this year through this IPO.

The CEO of Reddit needs to prove Reddit is profitable, or if not profitable... Will eventually be profitable. Stockholders don't care about Reddit drama for the most part, but most are smart enough to read financial sheets. Reddit needs to show growing revenue, growing profits and cutting costs to attract money.

As such, all of what Reddit's CEO has done makes sense in the context of the IPO. He is betting that shareholders won't notice the drop of high quality content creators from Reddit, since that's not a financial number that's reported. He can IPO, raising millions, maybe even billions for himself. The golden parachute outta here when everything gets screwed up in a year or two and collapses.

I think today's investors are smarter though, and the bearish economy and high interest rates means more investors will pay attention to underlying issues.

The VC money is drying up and they're demanding a return on investment as the world's economy struggles on at the moment.

Public companies are legally required to always do their best to grow year over year. Eventually these companies get so large they can't realistically get more market share so they have to figure out how to make more money from their users. This leads to them squeezing users for cash in the hunt for short term gains because they've already realistically capped out on how much money they can make per year. It's a dumb system that can't work in the long term.

Because of capitalism, no seriously these decisions are based on money and growth. But both of these things are relatively finite. You can't keep have exponential growth year after year. Eventually you will plateau but there isnt a mechanism in capitalism to accept that. So companies start forcing monetary gain.

Start making alternatives, open source alternatives.

Capitalism slowly shits up everything. Even the things it helps create.

I mean this in the most general way possible. Not just platforms. Even if reddit was profitable it would still continue. It's just part of the cycle of seeking not just profits but ever rising profits.

It's just more obvious lately on digital platforms because it has been kind of compressed into smaller amounts of time.

That which is free must find a way to cost.

That that makes money must find a way to make more.

And slowly but surely its takes on a fine shine. A glean seen from a distance. But when you get close you realize. "oh, its fucking shit all over it."

This is just what living in late stage capitalism looks like.

Economy is going bad, interest rate are up, and all Silicon Valley's company are built upon VC loans and expansion goals. Scale economy is bound to fail, and it's happening now.

Related question: why does it feel like hollywood is intent on completely destroying all of our beloved franchises? It's not like the place isn't overflowing with incredibly talented artists, writers, actors, producers, etc. I just don't understand why it's so hard for them to make something that isn't garbage.

Silicon Valley Bank collapsing is putting pressure on tech companies to actually turn a profit, so they're turning to slimy tactics just to survive IPO