You were being downvoted but I had the same thought — not as a statement about Twitter but because the circumstances of the sale were so controversial.
The best Counterpoint is that the average time of a company being part of the Fortune 500 is declining over time. This means that there's greater turnover and disruption. a Fortune 500 company today is less likely to still be a Fortune 500 company tomorrow then most of the history of the Fortune 500.
This tells a different story than the article which focuses on the average age of companies including time not part of the Fortune 500.
It would be interesting to run the same analysis for the Fortune 100 and the fortune 500 to 400 companies
> U.S. Steel was once the largest company in the world.
You're talking about practically ancient history. "In 1902, its first full year of operation, U.S. Steel made 67 percent of all the steel produced in the United States. About 100 years later, as of 2001, it produced only 8 percent more than it did in 1902, and its shipments accounted for only about 8 percent of domestic consumption." https://en.wikipedia.org/wiki/U.S._Steel
The federal government did try to break up U.S. Steel... in 1911.
> Us steel had a 120 year run without being toppled.
Um, no? It didn't magically go from 67% to 8% in the year 2001. It had already declined. In fact, it started to decline quickly: "Because of heavy debts taken on at the company's formation—Carnegie insisted on being paid in gold bonds for his stake—and fears of antitrust litigation, U.S. Steel moved cautiously. Competitors often innovated faster, especially Bethlehem Steel, run by Charles Schwab, U.S. Steel's former president. U.S. Steel's share of the expanding market slipped to 50 percent by 1911."
"Company lifespan" is a stupid metric. Any given company can hold on as best it can or be driven into the ground in a few years, depending on what management and the board does with it. There's no rule in business that says "oh, too old, time for you to go out of business now."
I agree, that's why I think it was a stupid metric for the author to use as the basis of their article. It doesn't matter if average F500 company age is increasing when the average time on the f500 is decreasing.
This is all beside the fact that company age itself is meaningless when you have a history full of mergers, acquisitions, and even reverse mergers or takeovers.
> It didn't magically go from 67% to 8% in the year 2001.
In fact, it never did that. It went from x million pounds of production to 1.08*x million pounds of production. It also went from 67% domestic market share to y% domestic market share.
Gluing a couple sources together it looks like US domestic steel production was worth $90 billion in 2020 and U.S. Steel has a revenue of $21 billion in 2021. That said, this is a volatile market and 2021 had 20-30% higher sales than 2020 and 2022.
That's really incredible. In the same time period the US population grew from about 80 million to 330 million. Roughly a quadrupling of the population and yet they only produced 7% more steel. Feels more like a company that was run overly conservatively and basically grew old and died.
This time it's different, though. In the age of computing, nobody will be able to step up to IBM — they control the entire industry. This is only going to be more true now that they have consolidated their control over the consumer computer market with the Personal Computer.
Elon’s titter shares are backed with his assets (mainly Tesla stock), so I dont see how titter will default unless tesla stock gets heavy heavy beating (which it surprisingly endured pretty well so far)
Twitter has not defaulted so far because elon can just pour money in and cut expenses - which he has been doing since taking over
No, Twitters 12.5 billion in debt is backed by Twitter. Money that Elon personally borrowed to buy Twitter, but Twitter is not on the hook for, is backed by Tesla. Elon defaulting won't affect his ownership of Twitter (because he pledged Tesla shares) and Twitter going to zero won't affect Elons other investments (unless he voluntarily adds more money to Twitter).
No way it happens before the 24 election. Musk with his Space company, his commanding lead on EV infrastructure and what is still a sizable pop culture megaphone has the US leadership by the balls in some respects.
If he overdoses the stock of a company that is listed in major indexes will crash. Thats a big deal and people will move heaven and earth to care for him because of that. Not to mention all the other things I mentioned: those things can't go away or the US is in big trouble so they will find a way to keep him going
Incumbents reinforce their moats through labyrinthine regulation (and bribery?) and are smarter than their predecessors in adapting to newer technologies.
It doesn't matter if you're hauled in front of congress if 2/3 of them are on your payroll. This is certainly the case for Google, Amazon, and probably TikTok at this point. It's been true for big pharma for half a century. I can't even remember a monopoly that was smashed outside of Big Bell.
> It doesn't matter if you're hauled in front of congress if 2/3 of them are on your payroll.
Everyone likes to say this, and sure, lobbying is a thing. But I doubt 99 percent of the people saying this can produce evidence of wide-scale bribes and corruption at the Federal level which could justify them saying it as often as they do.
No one can explain why regulators refuse to regulate corporate behemoths without this model.
And being on the payroll is played very differently now: consider the Pelosi family investment strategy as it relates to big tech. Bribes are not required to get paid.
You're accepting that lobbying is widespread, but keep asking for evidence of wide-scale bribes, I'm not sure to follow your logic. That's kind of arguing that politicians aren't corrupted, they just get personally rewarded for acting in favor of specific entities.
What I took from this article is that you can never beat incumbents by trying to offer a better version of their product. They already have immense institutionalized knowledge and economies of scale. You can only beat them by offering a different product that meets their needs better. Think Walmart vs Amazon. Online shopping is actually a completely different product.
An example today is the iPhone. There are a ton of competitors trying to offer a better version of the same thing, but iPhone share is only growing in the US. Is it possible to offer a product that better suits its niche of mobile general purpose computing? Maybe! But technology today is so capital and knowledge intensive that the kind of organization that can try is probably already about Apple-sized (Vision Pro?).
Personally I'm really hoping someone tries another gaming phone with buttons built in. There's really no always-with-you gaming solution that doesn't come with massive compromises.
You can beat them on customer experience but I have yet to see a company successfully scale it in the tech space (aside from possibly Apple). Everyone hates the incumbent, loves the personalized support, lack of ads, and breadth of features of the challenger, then enshitification happens as the challenger starts scaling.
I assume you didn't mean their brick and mortar stores, because some of the customer service I've experienced there has been atrocious. Why should I have to make an appointment just to buy one of their overpriced laptops? That's not how stores work.
Apple’s stores are too successful - they are beyond capacity.
In my area, the Apple Store represents about 40% of the mall’s gross sales. Although part of that is more a function of the decline of malls, the store is expanding for the 3rd time.
While I agree the stores are annoying (they seem like annoying jewelry shops filled with poser know-nothing cool kids) but they do have web accessible local inventory. Why do you make an appointment for that? I just buy anything I need online and pick up at the store when the order is ready. It's not like they customize anything. It's basically a glorified shoe store. They either have what you want on the shelf or they don't.
I've never had to make an appointment to walk in and buy something, although they do sometimes ask for a pickup window if you order ahead online. Even in the height of the pandemic I don't think they limited shopping to appointment only.
> Think Walmart vs Amazon. Online shopping is actually a completely different product.
This is actually a great example, but not the way you intended it.
Amazon isn't beating Walmart. They haven't even dented Walmart's revenue[1]. They're just killing everyone other than Walmart.
Walmart is now unbeatable because they're so big, they can demand wholesale prices that no one else can. If Walmart wants to buy 100M tomatoes from you, you'd sell them barely above cost because otherwise you're stuck with more tomatoes than you could ever sell.
To put it another way: you can't compete with these companies because they abuse their market power (either directly or through regulatory capture), not because they're actually that good at anything.
Dollar stores are certainly stealing a lot of Walmarts lunch in rural illinois and Iowa.
Why would you go 35min to Walmart if you just need 10 things when there's a dollar store 10 min away that's almost the same price as Walmart and much better shopping experience.
Yeah, and they're one of the reasons the poor stay poor. Dollar stores are a terrible value.
Walmart made a name for itself with its "rollback" program, where products would appear cheaper than competitors' because the SKU contained one less ounce/gram/unit. Dollar stores takes Walmart's own game to extremes; you buy a quart of watered-down bleach for $2, where buying an entire gallon (4x the volume) of the real thing would cost you $3 at Walmart.
Or, $20 for a 14-pack of Monster drinks at Walmart is a terrible deal when they're "just" $3 (each) at the gas station!
You see the same thing with people buying individual packs of cigarettes instead of an entire carton. The math works against them. They don't understand it.
There was a analysis, recently, that amongst users of the New York subway, the most common fare type amongst the poor was the pay per ride card. Even though it had the highest per-ride cost, it turns out that poor people living paycheck to paycheck simply cannot stump up the upfront cash to pay for the better deal. (As a result the new fare system combines both with automatic caps on pay as you go fares.)
Amazon Prime still cannot offer same day delivery.
But Walmart+ can.
As terrible as Walmart is, Amazon is a worse brand.
At this point, I'd rather direct my fund towards the ghost of Walton who during his life treated employees with respect versus a company that can only maintain profitability by treating workers terribly.
> Flyover country and flyover states are American phrases describing the parts of the contiguous United States between the East and the West Coasts. The origins of the phrases and the attitudes of their supposed users are a source of debate in American culture; the terms are often regarded as pejoratives, but are sometimes "reclaimed" and used defensively.
I've been reclaiming the phrase to mean the coastal states. Living in TX, California and New York are what I fly over to get to actually good places in Asia and Europe.
You can't compare Walmart to Amazon, Walmart is a northamerican thing, Amazon is global. Walmart has zero influence in the prices of the tomatoes grown in Europe.
Their international scale is similar, though I'm sure not in exactly the same places. Amazon had $118 billion in non-US revenue in the most recent fiscal year while Walmart had $101 billion.
If you limit it to only retail, Walmart probably comes out ahead.
Alas, them deciding to shut-down Book Depository means I can't purchase English/American books anymore free of customs-related taxes (I live in a Eastern European EU county), which makes me not purchasing those books at all (in many cases the taxes would end up doubling the purchase price, so it's not worth it). I'll never forgive Amazon for that.
The chart shows that Walmart revenue has grown 18% in 7 years, well below US GDP growth. Maybe they haven't dented revenue, but it's entirely possible they've dented revenue growth.
It also important to note that a corollary of this argument is that incumbents will still dominate their own sector - IBM still dominates mainframes. What matters to incumbents is whether or not those sectors are still relevant after disruption - mainframes less so, in-person grocery and shopping maybe more so.
Keeping prices low is a great thing. I wish Walmart and Amazon every success in that endeavor.
Abusing a monopoly is when you increase prices because you can. Offering lower prices is the opposite. If you can’t compete, then you’re in the wrong business.
To a first approximation, yes, but this also forces things like small farmers and retailers being unprofitable, and all the societal changes that come with that, and of course then the tendency for consolidation and the inherent risk of more monopolisation from that.
Free market is great when it's full and noisy and no-one is large enough to control or manipulate it, the aim should be to keep it in this state (because then keeping prices low falls out naturally without terrible second order effects)
> ...this also forces things like small farmers and retailers being unprofitable...
Nobody is "forced" to be unprofitable. If a business is unprofitable it can shut down. You're putting half the no-win argument - when Amazon makes a big profit people complain they are too powerful. When they don't make a big profit, this is an argument that they've squeezed the supply chain too much. There is a tiny line here that is theoretically acceptable, and I doubt either side of the no-win argument agrees where it is.
And this isn't what is driving the consolidation, the monopolisation is probably being driven by credit. Big players get much sweeter deals when dipping into the pool of printed money. If credit was not the driving force then it'd be much less common to see big conglomerates and small nimble players would have an easier time. Like how in housing credit booms tends to put smaller buyers in a worse position because they only end up living in about the same house as they already would have managed anyway but they have to sign away more of their life to get it.
>>Nobody is "forced" to be unprofitable. If a business is unprofitable it can shut down.
Check out the state of chicken farming, where chicken producers corral farmers take on huge amounts of debt to grow bigger to meet their requirements, then squeeze them hard, to the point of bankruptcy. The only winning move is to not play, but that means not selling to the buyers who control the market so likely losing the family farm. It's become just a matter of whether you lose it this year, or after a few years of churning under the producer's debt load.
There are numerous ways that a large monopoly can abuse their position of power such that the only real choice for smaller players is to play along in a losing game.
I’ve said it before and I’ll say it again: Progressively increasing asset taxes are the way. Make it more expensive to control a lot of resources to counteract the natural monopoly effect that comes from controlling large amounts of resources.
Isn't zero profit the point of a fully efficient economic model? Profits are excess money after costs by definition so in such a system you'd want profits to tend to zero.
If the prices are low because the quality of products is low, the treatment of workers is shit and any other negative environmental externalities are ignored, then low prices are actually a bad thing leading to artificially inflated demand.
I’m not saying any or all of this applies to Walmart or Amazon necessarily, but it’s not an unambiguous good to lower prices when it is not supported by all the reality around it.
I’ve had this discussion before but essentially it’s that nobody (very few) really want to buy low quality products.
They do if that is the only thing they can afford because of other shortcomings of society.
I'm not sure I understand. Resources are inherently limited. It would be nice if everyone could have whatever they want, but that's not reality. Until then people should be allowed to sacrifice quality in some of the things they consume to raise the quality of others.
Define quality more accurately than the poster you're replying to. Their definition of quality included goods produced while accounting for externalities, and non-abusive/exploitative workforce treatment.
It is not okay for a manufactured product built on the backs of slave/child labor/conflict to be sold in a market. There's a reason Conflict diamonds are verboten. There's a reason why it should be a big deal when a large industrial actor is found to be using these things as part of their production chain.
We cannot allow those that would sacrifice other's humanity to participate in our economy. Once you accept them, you've set the bar everyone else will quickly clamber to meet.
I think the OP was saying they abuse their monopsony power, that being a monopoly puts them in a monopsony position which they then abuse to maintain their monopoly.
The traditional endpoint-consumer-facing side of the market is just one part of the transaction web.
> Keeping prices low is a great thing. I wish Walmart and Amazon every success in that endeavor.
I don't. Our collective fetish to reduce prices to an absolute minimum has had nothing but terrible effects on pretty much everything.
It has increased poverty, it has decreased product quality, it has reduced the vibrancy and competitiveness of our economy, it has encouraged the worst aspects of our society.
And it hasn't made anything better for anybody. It's nothing but a collective self-destructive race to the bottom.
I disagree that Walmart abuses their market power.
Any supplier is free to bid on a Walmart request. They can walk away if it doesn’t make economic sense to them.
The Vlasic pickle story keeps coming up, but come on, Vlasic is huge, they knew what they were getting into.
If they were stupid enough to agree to lose money on every single jar of pickles, they should re-examine their business strategy.
Google tells me Walmart is 25.5% of all grocery sales. You can have a thriving business with the other 75% if you don’t think you can get a fair deal with Walmart.
Is there a different product that can not be cloned? Meta produced threads in what, a month? How long would it take your start up to get the users they did by turning it on?
The point being, a FAANG can start from zero and beat you to 1 MM users even if they only noticed your product idea once you launched.
I would love for that not to be the case, but we see it everywhere. At least for things that are competitive to them.
I’m not sure it matters much. The point is that they identified a potential area for a competitor to grow in social media and just utterly crushed the space. And now that it turns out maybe there isn’t much of a market it doesn’t even really matter to them, they can easily absorb that loss and move on.
Some people must think that it's impossible to reach iphone levels of stability, design, etc. but the truth is that google is simply incompetent in the same way microsoft was with windows phone.
Incompetent doesn't quite do it justice. Google doesn't even sell their phones world wide. It's depressing. They're the only phones with hardware security rivaling that of iPhones too. I don't know which's worse: having to buy from Google to use GrapheneOS or the realization that all the other manufacturers are even further behind.
With remote attestation there'll be no point in running android anyway. Might as well get an iPhone.
That's weird. Is there something about the telephony system in the iPhone that's better? First time I've ever seen anyone praise that. People generally care about the curated walled garden experience.
The iPhone is perhaps the worst example you could have picked. Its many competitors are more interested in pushing lock-screen ads than offering a quality phone.
Chaebols are sort of the product of a centrally planned economy. I.e the government backs a "winner" - so Korea can more quickly compete globally at scale. (competitive markets, but does not quickly industrialize an economy).
The article instead looks at massive capital consolidation as the product of a free market. The scale begets massive synergies (for lack of a better word) across vertical integration and horizontal expansion. This particularly holds true software firms. With those efficiencies, it becomes impossible for new entrants to enter a market even adjacent to a large incumbent.
This is not the product of the free market. Let's stop blaming the free market because it doesn't exist and it is a convenient scapegoat. We have no free market.
If the corner shop can go bankrupt but the trillion dollar company receives government help to pay its debts, it is not a free market.
If any tariffs system exists, which inherently favours a niche over the other, it is not a free market.
If once you reach a certain size you unlock ways to avoid paying your workers, skirt around taxes, because there are laws written to allow this, it is not a free market.
If the amount of money you control pays your way into the king's court, and helps sway the ones in power to write laws that favours you, it is not a free market.
> Chaebols are sort of the product of a centrally planned economy. I.e the government backs a "winner" - so Korea can more quickly compete globally at scale.
How are our Western democracies not centrally planned economies? Don't we have a central bank and a single place where all state powers flow from? Of course we don't operate like the CCCP did, but we are no less centrally-planned than they or Korea are.
We never had one a free market, we never had a decentralised economy, and we should be talking about that instead of living in that Eric Andre skit. Our system is set up to destroy any semblance of competition and meritocracy and then we wonder "who killed the small business?"
One thing free market enthusiasts and communists can agree on is that the attempts to implement their ideas are never quite pure enough to implicate the ideas themselves for the implementations’ failures.
We have all seen communism fail, but I still have to see the free market even be allowed to exist at large scale.
In the small scale, it has been working beautifully and as intended since its inception.
My corner shop lives in pure, unadultered competition with all other shops in the corner, and the governments favour neither one nor the other. They are not at risk at growing like a cancer and swallowing the entire neighbourhood. As long as they provide good products at reasonable prices, they are allowed to exist. The day they get greedy, people stop giving them money, they go bankrupt and someone else eats their lunch.
The free market creates an equal and opposing force to the human natural drive towards selfishness and greed. But if you put your hands on the mechanism, you risk tipping the scale in favour of one over the other. Blame the hand on the scale, not the market.
Is this some sort of parody or high-concept humor that has just gone over my head?
The big failures were fundamentally flawed in some way, and weren’t <my economic system of choice>. Here’s a small scale <commune|kibbutz|corner store> model that shows it could work if only given a chance, just need to scale it up.
I can’t quite reconcile this article with what I’ve seen before like this below…the methodology in the OP seems pretty questionable, so I trust this other article more.
Any definitive statements made about the past half century are pretty questionable, ideological biases notwithstanding (see “ The constant turnover in the Fortune 500 is a positive sign of the dynamism and innovation that characterizes a vibrant consumer-oriented market economy, and that dynamic turnover is speeding up in today’s hyper-competitive global economy.” and “Another economic lesson to be learned from the creative destruction that results in the constant churning of Fortune 500 (and S&P 500) companies over time is that the process of market disruption is being driven by the endless pursuit of sales and profits that can only come from serving customers with low prices, high quality products and services, and great customer service.”).
I think it’s not an unreasonable argument that the process of market disruption (over the past century at least) isn’t being driven by “the endless pursuit of profits that can only come from serving customers with low prices, high quality products and services, and great customer service” (LOL) but by some insane demographic changes occurring in the background of equally insane technological progress.
It actually seems quite delusional that, knowing about Moore’s Law/baby boomers/more than 5 tv channels, this person decided that customer service would be more important in deciding how the economy moves. Bonkers levels of autofellation, I say.
A potential reconciliation is that most of the companies left those lists via mergers with other companies on the list. It both consolidates power and gives churn to that list.
I don't know whether that's true or not, but it's notable that your article counts companies as "leaving" the list if they merge with someone else.
Complete tangent, but I noticed we posted the same exact link [1] around the same time and was curious what your research methodology was?
My Approach to suspect articles is to look for data that would either confirm or deny the claim in the article. Google article results are usually garbage so I look at image results to find actual data tables or charts. In this case, I found the link you posted by searching "Fortune 500 company turnover by year" and looking for line charts with a reasonable time frame.
Another factor is increased regulation: Big companies have an advantage that they can afford the lawyers to navigate the laws, often written by them via lobbyists.
Companies with first movers advantage build huge moats before industries get regulated, once they do those moats give them de facto primacy in their field.
I would actually point at regulation for most of the modern maladies we suffer, typically property rights, particularly IP, if only because we're oriented towards services now.
I think the more interesting story is about the death of the IPO and how the number of public companies today is half of what it was at the peak in the late 90s.
I don't know if this is due to more private funding, more acquisitions, regulatory capture, or what.
Despite living in the internet Information Age, it seems like it's less viable than ever to find public investors and Investments via IPO
The government? They're the reason they're so big and powerful in the first place. Politicians are easily swayed if you have billions of dollars to convince them to do your bidding.
Everything is set up to favour cancerous growth once you reach a certain size, and there are no real failsafe mechanisms against that. Antitrust is useless if it is never invoked, for example.
I wish we'd start to notice how our legislative, judicial and executive branches of government have been failing us for decades on this matter, instead of just wondering "how the hell did it come to that?" and blaming "capitalism", whatever that means.
Adam Smith alone doesn't explain how a company can skirt around the rules of free market competition and grow to a trillion dollars. You need a lot of external help from people in power to get there.
To add, the establishment LOVES when team red and blue fight over social issues.
Not that social issues aren't important, but the outcome of social issues never negatively affect the crony capitalists in power. Social issues are the opium of activists and pundits to distract the very same activists and pundits from decades of policy that only benefit the elite.
Raytheon LOVES when people fight about abortion rights.
Citibank LOVES when people fight about police reform.
None of these social issues actually matter if the entire middle class is ground to dust and scattered into the wind.
I’m afraid that indexing and the top heavy nature of the SP500 has made it very against the personal interests of anyone in power to do this. :( They know their own net worth will tumble if they break up the seven or so companies propping up the SP500 right now.
Hopefully some politicians will eventually realize they are put in power to serve the needs of everyone not just the rich that own stocks.
>In 2023, the percentages owning stock range from highs of 84% of adults in households earning $100,000 or more and about eight in 10 college graduates and postgraduates to a low of 29% of those in households earning less than $40,000.
How do you break them up? Most of the big tech companies have a large, singular business that makes most of the money. We could split Amazon into AWS, content, and store, and the store would still be a problem. Same with Google and search and ads, Meta with Facebook, Apple with iPhone.
This isn’t to say that splitting them isn’t worth doing, but it won’t do anything to help monopoly problems. The main result would be the death or price increase for smaller services.
> the digital revolution has not been all that revolutionary in some parts of the economy
Extreme concentration in tech has sucked the air out the "digital revolution".
When all the tech infrastructure is controlled by less than a handful of conglomerates there is no meaningful transformation of any other sector that will not involve them. This creates resistance by other corporate interests and a stalemate.
Financial services is particularly interesting as a study case as it is almost 100% information processing, hence fully "disruptable". Why is it not happening?
The article paints a picture of inertia as the reason for stagnation in financial services, apparently oblivious to the skirmishes and tiptoing going on: The facebook/libra fiasco, user as client vs user as product business models, the apple/goldman tieup, privacy and commercial secrecy concerns around cloud use etc.
In fact the gazillion valuations of big tech is the market telling us that it expects they will swallow any digitally transformed sector.
For society to see a dividend from the digital revolution (seen eg in a number of major new enterprises that are fully transformed by tech), tech must get democratised. For as long as there is a racket that gets a 30% cut of all action there will be an eerily ominous quiet in the marketplace.
Financial services is particularly interesting as a study case as it is almost 100% information processing, hence fully "disruptable". Why is it not happening?
Never underestimate mass opinion shaping by incumbants. There is a well known answer to your question that many scoff at because they've read a lot of negative articles about it.
Assuming your refer to cryptocurrency, in a way it already disrupted financial services. I disagree with negative articles being the reason why people "scoff" at them. I think specific cryptocurrencies have a lot to genuinely criticize.
Cryptocurrencies didn't disrupt anything though. It was supposed to liberate us from banks and their fees. They reinvented banks and the entire financial system on top of crypto, exchanges are literally unregulated banks. It was supposed to free us from government currencies. It turned into stocks instead. A good currency like Monero that actually works for transacting quickly, cheaply and anonymously? Nobody cares about it or uses it.
I couldn't care less about fraud. I would put up with it if it meant real change in the rotten status quo. What happened instead is just banks all over again and it emboldened governments to rob us of even more autonomy by pushing their centralized digital currencies. In many ways we are worse off than before and I don't mean scam coins or the negligible energy consumption of proof of work.
The rotten status quo is not a result of any technological limitations but of human greed and the financial incentives our economic system provides. You can't "disrupt" that, short of a cultural or political revolution. Something like this outcome was inevitable.
XRP was meant to disrupt the SWIFT network, but doesn't seem to have made a dent so far as the incumbent (SWIFT) improved performance and lowered fees (IIRC) and has maintained its position.
>Financial services is particularly interesting as a study case as it is almost 100% information processing, hence fully "disruptable".
disruptability is inhibited by the amount of regulation in a sector, the more rules you have to follow the less likely you are able to find a profitable path to exploit that someone has not found before you because regulation limits the amount of paths available.
Many of the disrupters of industries over the past two decades are ones that managed to find a way to sidestep the regulation in the industry. When this occurs and regulation inevitably catches up the disruption turns out to no longer be as able to beat the incumbents as thought.
Sidestepping of regulation is often achieved because regulators don't care too much about regulating your disrupting innovation, the level of care that regulators have regarding innovations in their industry can be measured by how central the industry to the orderly functioning of society and the normal flow of power within it.
As an example - people don't care that much about the regulation of taxis and hotels because they don't really mean shit in the grand scheme of things. People care a lot more about regulating international trade or banking or investment, although from outside the industry, in the views of easily outraged observers, it might not seem like it.
Thus finance is one of the least disruptable fields, appearances to the contrary.
Regulation definitely raises some barriers (e.g., you can't bootstrap an amazing new banking concept in your garage - not a legal one anyway) but fulfilling the criteria for a banking license is not a major obstacle. Much of regulation is also by-and-large needed, as it is easy to implement and abuse new "schemes" (cite: explosion of crypto scams). The cost of this type of regulation is really just the cost of delivering a safe product. If anything, meeting regulatory requirements should be more efficient with a fully digital operation.
There are some further reasons that do provide a "moat" to incumbents (thus protecting against disruptability). Many parts of the financial and monetary system are effectively backstopped by the state/collective. The combination of poor oversight, confidence games, recurring bailouts and desire for political leverage means that over time the preferred pattern is to have a few opaque behemoths that operate in a close symbiotic relationship with the state.
Yet all these factors are minor in the scheme of things. Finance is like 15% of the economy. It is a huge sector with plenty of opportunity to innovate. Imho, the main reason financial services have not been digitally disrupted is that the sector is devoid of embedded technical DNA, the more so the higher up in the hierarchy. Even though it works exclusively with information, "IT" was always something outsourced to a department in the basement (and nowadays increasingly to the "cloud").
Combine that structural human capital weakness with big (ad) tech completely shaping the digital agenda, from AI chips to devices, to OSes, applications and network information flows and you get the current calm before the storm.
Well, if you want to open a bank (assuming you have the capital), in most countries you will not be allowed to run said bank unless you have sufficient experience.
IT wasn't (and isn't) always something that sits on a basement, maybe for all the also-run banks. Global Markets has been and is full technology, for example (in banks and non-banks).
And there has been a huge amount of disruption in financial services, it is just a lot more self-disruptive than perhaps other sectors (and the US has a particular poor retail banking/payments system but don't assume that that is globally an issue).
There are definitely various exceptions. E.g., high frequency trading was the result of a technology arms race that was quite ahead of its time. (Maybe one day adtech will be also limited by the speed of light [1] :-) Also proprietary trading was quick to link to social media and mine "sentiment".
But in core financial services (payments, savings and loans), covered by buzzwords like "fintech" or neobanks there has not been much qualitative change. See also the failure of much hyped "innovation" in the form of the various blockchain projects (which pressumably will now be followed by various "AI" projects). Trying to belatedly join the latest hype instigated by others is precisely the behavior of a sector that does not understand and own its information technology.
I'd agree but it is also not clear what actual "innovation" customers might want. Depending on where you are, you already have instant transfers, dematerialized credit cards, some real-time credit approval, etc.
You also need to see the nods to hypes at least partially as signalling not as necessary acknowledging a lot of value there.
Alright, let me check how people access websites. Oh wait, > 90% controlled by three entities. In the EU this phenomenon has been termed "gatekeeping".
In effect the digital transformation of every other sector (the vast majority of the economy) must flow through this choke point.
> Financial services is particularly interesting as a study case as it is almost 100% information processing, hence fully "disruptable". Why is it not happening?
I'm not sure I agree finance has not been disrupted. I can immediately think a few financial industry disruptions, some even outside incumbents. Fractional reserve banking, credit cards, asset backed securities, online payment providers, regulation, hedge funds are some things that have changed dramatically how financial business (some aspect of it) is done during the last century or two.
One thing that may hide all this is is that the ones currently shouting loudest about disrupting finance seem to have a serious lack of understanding what finance actually is and how it works, and until they do, I don't think they disrupt anything.
You missed the most insidious innovation of all, derivative contracts and markets :-).
Yes, fully agree that over a larger horizon financial services have been evolving and innovating (not always in a controlled or beneficial manner).
It is also true that previous digital innovations (databases, spreadsheets and... powerpoints) have been adopted (as in bought / licensed) and were instrumental to enable all these innovations on the financial side.
What the financial sector did not realize is that as the information universe coelesces and, e.g., advertisers or retailers come to invent and dominate technological platforms innovation cannot happen with rented tools.
> the ones currently shouting loudest about disrupting finance seem to have a serious lack of understanding what finance actually is
the disconnect between (digital) technical and domain knowledge is exactly what I think is the problem
one of the more effective ways to topple them is using laws that serve the people. but, as long as they still keep doing "lobbying", which is a corrupt practice in many other places, then we're not going see anything different.
Coincidentally, the audible book I was just listening to, mentioned how the VC firms in the mid-70s passed on investment opportunities with the mindset that start-ups cannot take on IBM.
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[ 4.2 ms ] story [ 208 ms ] threadU.S. Steel is for sale for $7 billion. One-sixth of Twitter's sale price.
U.S. Steel was once the largest company in the world.
This tells a different story than the article which focuses on the average age of companies including time not part of the Fortune 500.
It would be interesting to run the same analysis for the Fortune 100 and the fortune 500 to 400 companies
https://www.aei.org/carpe-diem/only-52-us-companies-have-bee...
You're talking about practically ancient history. "In 1902, its first full year of operation, U.S. Steel made 67 percent of all the steel produced in the United States. About 100 years later, as of 2001, it produced only 8 percent more than it did in 1902, and its shipments accounted for only about 8 percent of domestic consumption." https://en.wikipedia.org/wiki/U.S._Steel
The federal government did try to break up U.S. Steel... in 1911.
It's hard to guess where Apple or Google will be in 100 years
Um, no? It didn't magically go from 67% to 8% in the year 2001. It had already declined. In fact, it started to decline quickly: "Because of heavy debts taken on at the company's formation—Carnegie insisted on being paid in gold bonds for his stake—and fears of antitrust litigation, U.S. Steel moved cautiously. Competitors often innovated faster, especially Bethlehem Steel, run by Charles Schwab, U.S. Steel's former president. U.S. Steel's share of the expanding market slipped to 50 percent by 1911."
If you want to talk specifically about average company time in the Fortune 500, that has been going down
This is all beside the fact that company age itself is meaningless when you have a history full of mergers, acquisitions, and even reverse mergers or takeovers.
In fact, it never did that. It went from x million pounds of production to 1.08*x million pounds of production. It also went from 67% domestic market share to y% domestic market share.
Gluing a couple sources together it looks like US domestic steel production was worth $90 billion in 2020 and U.S. Steel has a revenue of $21 billion in 2021. That said, this is a volatile market and 2021 had 20-30% higher sales than 2020 and 2022.
End of the day, steel is a capital intense, low margin business dominated by Asian competition.
Twitter has not defaulted so far because elon can just pour money in and cut expenses - which he has been doing since taking over
They still get hauled in front of Congress, but it doesn't seem to matter much nor affect their business.
Everyone likes to say this, and sure, lobbying is a thing. But I doubt 99 percent of the people saying this can produce evidence of wide-scale bribes and corruption at the Federal level which could justify them saying it as often as they do.
And being on the payroll is played very differently now: consider the Pelosi family investment strategy as it relates to big tech. Bribes are not required to get paid.
https://www.opensecrets.org/revolving/
What I took from this article is that you can never beat incumbents by trying to offer a better version of their product. They already have immense institutionalized knowledge and economies of scale. You can only beat them by offering a different product that meets their needs better. Think Walmart vs Amazon. Online shopping is actually a completely different product.
An example today is the iPhone. There are a ton of competitors trying to offer a better version of the same thing, but iPhone share is only growing in the US. Is it possible to offer a product that better suits its niche of mobile general purpose computing? Maybe! But technology today is so capital and knowledge intensive that the kind of organization that can try is probably already about Apple-sized (Vision Pro?).
https://sidetalking.com/
In my area, the Apple Store represents about 40% of the mall’s gross sales. Although part of that is more a function of the decline of malls, the store is expanding for the 3rd time.
This is actually a great example, but not the way you intended it.
Amazon isn't beating Walmart. They haven't even dented Walmart's revenue[1]. They're just killing everyone other than Walmart.
Walmart is now unbeatable because they're so big, they can demand wholesale prices that no one else can. If Walmart wants to buy 100M tomatoes from you, you'd sell them barely above cost because otherwise you're stuck with more tomatoes than you could ever sell.
To put it another way: you can't compete with these companies because they abuse their market power (either directly or through regulatory capture), not because they're actually that good at anything.
1. https://fourweekmba.com/amazon-vs-walmart/
They execute well to clear the competitive landscape. Then just well enough to prevent new competition from exploiting a subpar performance gradient.
Success grows fat off of easy cash flows instead of staying nimble. That's every major tech company and most big conglomerates.
If anything, the dollar stores represent more of a threat to Walmart.
The jump to being a five dollar store that the other one did is doomed to failure.
Why would you go 35min to Walmart if you just need 10 things when there's a dollar store 10 min away that's almost the same price as Walmart and much better shopping experience.
Walmart made a name for itself with its "rollback" program, where products would appear cheaper than competitors' because the SKU contained one less ounce/gram/unit. Dollar stores takes Walmart's own game to extremes; you buy a quart of watered-down bleach for $2, where buying an entire gallon (4x the volume) of the real thing would cost you $3 at Walmart.
Or, $20 for a 14-pack of Monster drinks at Walmart is a terrible deal when they're "just" $3 (each) at the gas station!
You see the same thing with people buying individual packs of cigarettes instead of an entire carton. The math works against them. They don't understand it.
There was a analysis, recently, that amongst users of the New York subway, the most common fare type amongst the poor was the pay per ride card. Even though it had the highest per-ride cost, it turns out that poor people living paycheck to paycheck simply cannot stump up the upfront cash to pay for the better deal. (As a result the new fare system combines both with automatic caps on pay as you go fares.)
For the same quality? With the same workers' rights? With at least ea liveable profit for their providers?
I’ll let Prime expire and see if the ghost of Sam Walton can get me to go for WalmartPrime™.
Amazon Prime still cannot offer same day delivery.
But Walmart+ can.
As terrible as Walmart is, Amazon is a worse brand.
At this point, I'd rather direct my fund towards the ghost of Walton who during his life treated employees with respect versus a company that can only maintain profitability by treating workers terribly.
https://en.wikipedia.org/wiki/Flyover_country
And if you avoid marketplace sellers they have quite a bit of everything, too.
Amazon around here uses UPS but if they stop doing that I will probably lean ever harder on Walmart.
If you limit it to only retail, Walmart probably comes out ahead.
Alas, them deciding to shut-down Book Depository means I can't purchase English/American books anymore free of customs-related taxes (I live in a Eastern European EU county), which makes me not purchasing those books at all (in many cases the taxes would end up doubling the purchase price, so it's not worth it). I'll never forgive Amazon for that.
It also important to note that a corollary of this argument is that incumbents will still dominate their own sector - IBM still dominates mainframes. What matters to incumbents is whether or not those sectors are still relevant after disruption - mainframes less so, in-person grocery and shopping maybe more so.
Abusing a monopoly is when you increase prices because you can. Offering lower prices is the opposite. If you can’t compete, then you’re in the wrong business.
To a first approximation, yes, but this also forces things like small farmers and retailers being unprofitable, and all the societal changes that come with that, and of course then the tendency for consolidation and the inherent risk of more monopolisation from that.
Free market is great when it's full and noisy and no-one is large enough to control or manipulate it, the aim should be to keep it in this state (because then keeping prices low falls out naturally without terrible second order effects)
Nobody is "forced" to be unprofitable. If a business is unprofitable it can shut down. You're putting half the no-win argument - when Amazon makes a big profit people complain they are too powerful. When they don't make a big profit, this is an argument that they've squeezed the supply chain too much. There is a tiny line here that is theoretically acceptable, and I doubt either side of the no-win argument agrees where it is.
And this isn't what is driving the consolidation, the monopolisation is probably being driven by credit. Big players get much sweeter deals when dipping into the pool of printed money. If credit was not the driving force then it'd be much less common to see big conglomerates and small nimble players would have an easier time. Like how in housing credit booms tends to put smaller buyers in a worse position because they only end up living in about the same house as they already would have managed anyway but they have to sign away more of their life to get it.
Check out the state of chicken farming, where chicken producers corral farmers take on huge amounts of debt to grow bigger to meet their requirements, then squeeze them hard, to the point of bankruptcy. The only winning move is to not play, but that means not selling to the buyers who control the market so likely losing the family farm. It's become just a matter of whether you lose it this year, or after a few years of churning under the producer's debt load.
There are numerous ways that a large monopoly can abuse their position of power such that the only real choice for smaller players is to play along in a losing game.
I’m not saying any or all of this applies to Walmart or Amazon necessarily, but it’s not an unambiguous good to lower prices when it is not supported by all the reality around it.
I don't see how this is a bad thing. If people want to buy cheap low quality products they should be able to.
Edit: Found the previous discussion https://news.ycombinator.com/item?id=36630612
It is not okay for a manufactured product built on the backs of slave/child labor/conflict to be sold in a market. There's a reason Conflict diamonds are verboten. There's a reason why it should be a big deal when a large industrial actor is found to be using these things as part of their production chain.
We cannot allow those that would sacrifice other's humanity to participate in our economy. Once you accept them, you've set the bar everyone else will quickly clamber to meet.
The traditional endpoint-consumer-facing side of the market is just one part of the transaction web.
In absolute terms, no, it isn't! Think "race to the bottom".
Coupled with the proper checks, low prices can be great.
I don't. Our collective fetish to reduce prices to an absolute minimum has had nothing but terrible effects on pretty much everything.
It has increased poverty, it has decreased product quality, it has reduced the vibrancy and competitiveness of our economy, it has encouraged the worst aspects of our society.
And it hasn't made anything better for anybody. It's nothing but a collective self-destructive race to the bottom.
Talk is cheap. Show me the maths.
Any supplier is free to bid on a Walmart request. They can walk away if it doesn’t make economic sense to them.
The Vlasic pickle story keeps coming up, but come on, Vlasic is huge, they knew what they were getting into.
If they were stupid enough to agree to lose money on every single jar of pickles, they should re-examine their business strategy.
Google tells me Walmart is 25.5% of all grocery sales. You can have a thriving business with the other 75% if you don’t think you can get a fair deal with Walmart.
The point being, a FAANG can start from zero and beat you to 1 MM users even if they only noticed your product idea once you launched.
I would love for that not to be the case, but we see it everywhere. At least for things that are competitive to them.
It took meta 6 months from starting to work on it to making their public release
They are still missing features like a web version so they have been working at for 8 months now and still not "finished"
Some aspects of androids are better computers, but certain the phone and communication part of them is far far behind.
* least bad. Out of two options.
With remote attestation there'll be no point in running android anyway. Might as well get an iPhone.
The article instead looks at massive capital consolidation as the product of a free market. The scale begets massive synergies (for lack of a better word) across vertical integration and horizontal expansion. This particularly holds true software firms. With those efficiencies, it becomes impossible for new entrants to enter a market even adjacent to a large incumbent.
If the corner shop can go bankrupt but the trillion dollar company receives government help to pay its debts, it is not a free market.
If any tariffs system exists, which inherently favours a niche over the other, it is not a free market.
If once you reach a certain size you unlock ways to avoid paying your workers, skirt around taxes, because there are laws written to allow this, it is not a free market.
If the amount of money you control pays your way into the king's court, and helps sway the ones in power to write laws that favours you, it is not a free market.
> Chaebols are sort of the product of a centrally planned economy. I.e the government backs a "winner" - so Korea can more quickly compete globally at scale.
How are our Western democracies not centrally planned economies? Don't we have a central bank and a single place where all state powers flow from? Of course we don't operate like the CCCP did, but we are no less centrally-planned than they or Korea are.
We never had one a free market, we never had a decentralised economy, and we should be talking about that instead of living in that Eric Andre skit. Our system is set up to destroy any semblance of competition and meritocracy and then we wonder "who killed the small business?"
In the small scale, it has been working beautifully and as intended since its inception.
My corner shop lives in pure, unadultered competition with all other shops in the corner, and the governments favour neither one nor the other. They are not at risk at growing like a cancer and swallowing the entire neighbourhood. As long as they provide good products at reasonable prices, they are allowed to exist. The day they get greedy, people stop giving them money, they go bankrupt and someone else eats their lunch.
The free market creates an equal and opposing force to the human natural drive towards selfishness and greed. But if you put your hands on the mechanism, you risk tipping the scale in favour of one over the other. Blame the hand on the scale, not the market.
The big failures were fundamentally flawed in some way, and weren’t <my economic system of choice>. Here’s a small scale <commune|kibbutz|corner store> model that shows it could work if only given a chance, just need to scale it up.
https://www.aei.org/carpe-diem/fortune-500-firms-1955-v-2016...
I think it’s not an unreasonable argument that the process of market disruption (over the past century at least) isn’t being driven by “the endless pursuit of profits that can only come from serving customers with low prices, high quality products and services, and great customer service” (LOL) but by some insane demographic changes occurring in the background of equally insane technological progress.
It actually seems quite delusional that, knowing about Moore’s Law/baby boomers/more than 5 tv channels, this person decided that customer service would be more important in deciding how the economy moves. Bonkers levels of autofellation, I say.
I don't know whether that's true or not, but it's notable that your article counts companies as "leaving" the list if they merge with someone else.
My Approach to suspect articles is to look for data that would either confirm or deny the claim in the article. Google article results are usually garbage so I look at image results to find actual data tables or charts. In this case, I found the link you posted by searching "Fortune 500 company turnover by year" and looking for line charts with a reasonable time frame.
https://news.ycombinator.com/item?id=37218514
Companies with first movers advantage build huge moats before industries get regulated, once they do those moats give them de facto primacy in their field.
I would actually point at regulation for most of the modern maladies we suffer, typically property rights, particularly IP, if only because we're oriented towards services now.
I don't know if this is due to more private funding, more acquisitions, regulatory capture, or what.
Despite living in the internet Information Age, it seems like it's less viable than ever to find public investors and Investments via IPO
https://www.google.com/amp/s/finance.yahoo.com/amphtml/news/...
Comparing the number of public companies around an IPO-fueled bubble isn't a fair comparison.
Themselves? Of course not.
The government? They're the reason they're so big and powerful in the first place. Politicians are easily swayed if you have billions of dollars to convince them to do your bidding.
Everything is set up to favour cancerous growth once you reach a certain size, and there are no real failsafe mechanisms against that. Antitrust is useless if it is never invoked, for example.
I wish we'd start to notice how our legislative, judicial and executive branches of government have been failing us for decades on this matter, instead of just wondering "how the hell did it come to that?" and blaming "capitalism", whatever that means.
Adam Smith alone doesn't explain how a company can skirt around the rules of free market competition and grow to a trillion dollars. You need a lot of external help from people in power to get there.
Not that social issues aren't important, but the outcome of social issues never negatively affect the crony capitalists in power. Social issues are the opium of activists and pundits to distract the very same activists and pundits from decades of policy that only benefit the elite.
Raytheon LOVES when people fight about abortion rights.
Citibank LOVES when people fight about police reform.
None of these social issues actually matter if the entire middle class is ground to dust and scattered into the wind.
https://www.spglobal.com/marketintelligence/en/news-insights...
Hopefully some politicians will eventually realize they are put in power to serve the needs of everyone not just the rich that own stocks.
>In 2023, the percentages owning stock range from highs of 84% of adults in households earning $100,000 or more and about eight in 10 college graduates and postgraduates to a low of 29% of those in households earning less than $40,000.
This isn’t to say that splitting them isn’t worth doing, but it won’t do anything to help monopoly problems. The main result would be the death or price increase for smaller services.
Extreme concentration in tech has sucked the air out the "digital revolution".
When all the tech infrastructure is controlled by less than a handful of conglomerates there is no meaningful transformation of any other sector that will not involve them. This creates resistance by other corporate interests and a stalemate.
Financial services is particularly interesting as a study case as it is almost 100% information processing, hence fully "disruptable". Why is it not happening?
The article paints a picture of inertia as the reason for stagnation in financial services, apparently oblivious to the skirmishes and tiptoing going on: The facebook/libra fiasco, user as client vs user as product business models, the apple/goldman tieup, privacy and commercial secrecy concerns around cloud use etc.
In fact the gazillion valuations of big tech is the market telling us that it expects they will swallow any digitally transformed sector.
For society to see a dividend from the digital revolution (seen eg in a number of major new enterprises that are fully transformed by tech), tech must get democratised. For as long as there is a racket that gets a 30% cut of all action there will be an eerily ominous quiet in the marketplace.
It's pretty depressing really.
One silver lining is the Fed got off it's fat ass and conjured up FedNow as an alternative to the slow ass ACH system.
disruptability is inhibited by the amount of regulation in a sector, the more rules you have to follow the less likely you are able to find a profitable path to exploit that someone has not found before you because regulation limits the amount of paths available.
Many of the disrupters of industries over the past two decades are ones that managed to find a way to sidestep the regulation in the industry. When this occurs and regulation inevitably catches up the disruption turns out to no longer be as able to beat the incumbents as thought.
Sidestepping of regulation is often achieved because regulators don't care too much about regulating your disrupting innovation, the level of care that regulators have regarding innovations in their industry can be measured by how central the industry to the orderly functioning of society and the normal flow of power within it.
As an example - people don't care that much about the regulation of taxis and hotels because they don't really mean shit in the grand scheme of things. People care a lot more about regulating international trade or banking or investment, although from outside the industry, in the views of easily outraged observers, it might not seem like it.
Thus finance is one of the least disruptable fields, appearances to the contrary.
on edit: fixed typo
There are some further reasons that do provide a "moat" to incumbents (thus protecting against disruptability). Many parts of the financial and monetary system are effectively backstopped by the state/collective. The combination of poor oversight, confidence games, recurring bailouts and desire for political leverage means that over time the preferred pattern is to have a few opaque behemoths that operate in a close symbiotic relationship with the state.
Yet all these factors are minor in the scheme of things. Finance is like 15% of the economy. It is a huge sector with plenty of opportunity to innovate. Imho, the main reason financial services have not been digitally disrupted is that the sector is devoid of embedded technical DNA, the more so the higher up in the hierarchy. Even though it works exclusively with information, "IT" was always something outsourced to a department in the basement (and nowadays increasingly to the "cloud").
Combine that structural human capital weakness with big (ad) tech completely shaping the digital agenda, from AI chips to devices, to OSes, applications and network information flows and you get the current calm before the storm.
IT wasn't (and isn't) always something that sits on a basement, maybe for all the also-run banks. Global Markets has been and is full technology, for example (in banks and non-banks).
And there has been a huge amount of disruption in financial services, it is just a lot more self-disruptive than perhaps other sectors (and the US has a particular poor retail banking/payments system but don't assume that that is globally an issue).
But in core financial services (payments, savings and loans), covered by buzzwords like "fintech" or neobanks there has not been much qualitative change. See also the failure of much hyped "innovation" in the form of the various blockchain projects (which pressumably will now be followed by various "AI" projects). Trying to belatedly join the latest hype instigated by others is precisely the behavior of a sector that does not understand and own its information technology.
[1] https://www.nature.com/articles/518161a
You also need to see the nods to hypes at least partially as signalling not as necessary acknowledging a lot of value there.
I guess you are referring to App stores, and it is true there. Tech also includes websites, and they are not affected by this tax.
Alright, let me check how people access websites. Oh wait, > 90% controlled by three entities. In the EU this phenomenon has been termed "gatekeeping".
In effect the digital transformation of every other sector (the vast majority of the economy) must flow through this choke point.
I'm not sure I agree finance has not been disrupted. I can immediately think a few financial industry disruptions, some even outside incumbents. Fractional reserve banking, credit cards, asset backed securities, online payment providers, regulation, hedge funds are some things that have changed dramatically how financial business (some aspect of it) is done during the last century or two.
One thing that may hide all this is is that the ones currently shouting loudest about disrupting finance seem to have a serious lack of understanding what finance actually is and how it works, and until they do, I don't think they disrupt anything.
Yes, fully agree that over a larger horizon financial services have been evolving and innovating (not always in a controlled or beneficial manner).
It is also true that previous digital innovations (databases, spreadsheets and... powerpoints) have been adopted (as in bought / licensed) and were instrumental to enable all these innovations on the financial side.
What the financial sector did not realize is that as the information universe coelesces and, e.g., advertisers or retailers come to invent and dominate technological platforms innovation cannot happen with rented tools.
> the ones currently shouting loudest about disrupting finance seem to have a serious lack of understanding what finance actually is
the disconnect between (digital) technical and domain knowledge is exactly what I think is the problem