Comment by cyberax | Hacker News Reader

Comment by cyberax | Hacker News Reader

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That's not what we're seeing. Companies grow big enough to take over entire sectors of the economy, the economy of scale works against smaller competitors.

And once you're big enough, you can just offload your inefficiencies onto the consumer (the "enshittification" stage). As long as you're not _terribly_ bad, competitors won't be able to overcome your network effects.

What _really_ held companies from taking over the world was the inherent overheads of distributed corporate structures. Before computers, you couldn't really manage a horizontal company with offices in hundreds of different cities. Network effects were also less pronounced.

Internet-enabled companies like Google (or Yandex, Baidu, etc.) are a really great example. The early Internet was about as close to a perfect free market as possible. And in every case (Google in the US, Yandex in Russia, Baidu in China) the same thing happened: one large company ended up dominating and then gobbling up all the competitors.

So what happened to Sears, IBM, RCA, GE, Kodak, etc.?

Why are the biggest companies of recent origin?

> So what happened to Sears, IBM, RCA, GE, Kodak, etc.?

They never had a chance to expand in the post-computer era. GE was really close, but they switched to the "do everything" model a bit too early. Before computers, your only option was to have a financial stake in other companies, and this doesn't provide enough control.

As for IBM, I think it just lacks the ambition to do anything drastic. You don't get _automatic_ world takeover, you need to work for it. But others are giving a good run for it, just look at the recent acquisitions by Oracle.

People in the 1980s thought it was inevitable that IBM was going to take over the world. They offered the same arguments you have.

They were too early. Collaboration tools and business practices built around them matured only in the 2000-s, with video conferencing becoming widely available only in the 2010-s.

If you want to study the history of bureaucracy and business (an exciting topic!), it took about 20 years for companies to adapt their business processes to be typewriter-friendly. The key invention: short memos rather than long-form letters.

So yeah, my answer is that prior to the modern computer era, companies had a natural maximum limit on their complexity*size metric. This naturally limited the scope of world takeovers and made monopolies self-limiting in the long run.

These limits have now increased, and we're seeing companies taking advantage of that.

Some numbers: the largest unregulated (i.e. not AT&T) company in the pre-computer era was GM, peaking around 600k employees in the 80-s. Amazon has 1.5 million employees now. Walmart is about 2.1 million, Alphabet is at ~250k.

And these companies are not showing any signs of slowing their growth down.

Those are fairly recent companies, and they replaced the earlier giants. Like IBM.

IBM is still around. Look at its stock price. If anything, it's an example of how post-computer companies are much more nimble than their predecessors like the RCA that couldn't pivot from a dying market.

So let's invert your argument and try to find counterexamples.

Google is already close to 30 years old. It's not a new company. Microsoft is more than 50 years old! Do you have examples of large pre-computer-era companies that were at least this old and yet were able to successfully enter and expand in new markets? And not just by buying a stake in some company but incorporating new products into the parent company.

My fear is that AI will make that even more scalable, enabling even larger companies.

IBM is a mere shadow of it was in the 1980s, when everyone waited breathlessly for every new move by IBM. I haven't seen IBM in the news for many years.

I remember a comment in the tech news from 25 years ago - "nobody is afraid of Microsoft anymore".

You are just a bit biased by your experience working in software. IBM was smaller than it's right now, but the whole industry was even smaller.

And you actually are failing to see what I'm trying to say. IBM is a GREAT example of my point. They pivoted from a company that makes keyboards and PCs to a company that makes custom solutions with specialized hardware and software.

This sort of corporate flexibility used to be extremely rare, and that's why you have so many examples of companies that just withered away. And this corporate stagnation was the only real limiting factor of corporate growth.

It's now gone. Companies now have much higher upper limit of complexity. It's still a competition, so it's not like every company is going to become "The Corporation" from dystopias. But there's no inherent limiter that prevents it anymore.

IBM has been left far behind.

You are arguing technicalities, your interlocutor is arguing overarching patterns.

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