How to make a company not suck
How to make a company not suck
I've been thinking about enshitification recently, and I'm also working on a startup with a friend that just received funding. I've been wondering how one might arrange a business such that it won't gradually trend towards shittier products in search of higher profit margins.
Obviously, it would be nice to redesign all of society so that this isn't a thing, but barring that, does anyone have any ideas for setting up a business in such a way that motivations are aligned with producing a good product?
Currently, we're trying to retain as much control as possible, but at some point we may go public, and if we do, I'm not sure how to keep us aimed at accomplishing our goals. We're building a platform that should solve or at least improve the replication crisis in scientific research, and we could lose control to investors that want board seats, or sell to someone like Google.
If we do either, I doubt the company will do what we want it to do in the long term.
Going public is the route that seems less likely to lead to this change in direction, but it seems like it could end in the same place over a long enough timeline.
You're viewing a single thread.
Regarding "retaining control" there are a number of stakeholders that almost never "retain control".
- customers have no direct control over your strategic direction, but they have indirect vote with dollars. Companies will often hire a "FP&A analyst" to try to guess the trends and the ways that a customer will need to be, but often you need straight up contact with customers (interview a random 25 customers each quarter about questions key to your competencies and areas of frustration before the FP&A guy starts crunching numbers and saying that "this is where the market is" in a garbage in and garbage out manner)
- employees (not management) have no direct control over your strategic direction, but they have an indirect effect on productivity and profits. In my opinion, there should be a benefit like "donation to a office worker union" that represents employees but does not actually make them salt/unionize in your office unless you start the path of enshittification.
- regulators have no direct control over your strategic direction, but they can dry up your supply or your demand with hurdles to jump over. Spending a little bit of money to have a seat at the table in regulations that are directly applicable to your business is an important civic duty of businesses. If you have legal counsel on a retainer, then they should be able to give you a summary of laws and regs that are being considered so you can make your voice heard.
- vendors have no direct control over your strategic direction, but they can produce synergies or referrals if you treat them right. Keeping a pulse on your vendors and being willing to take an insurance policy out incase a crucial vendor will cause you to lose revenue if they fail is a good business.
- Hedge against stupid risk - try to match your variable revenues to variable expenses. Also try to match your fixed revenues to fixed expenses. Example: if you have a lease on a building that costs a fixed amount no matter what monthly, then try to have that office serve recurring contract customers at least equal to the cost of rent. You can then spend the rest of capacity on Variable revenue that correlates closer to the variable expenses like salaries of salespeople.