I call this the cycle of disruption.

A company makes a really good product as first challenging incumbents. They get so big, they eventually become the incumbent. All this time, they’re probably losing money on the product or breaking even. Eventually, investors will want returns on their investment. This will first happen with prices increases to save the quality of the product. Once they can’t raise prices anymore, the quality will be decreased. By this point, the brand is strong enough to get sales even on this worse product.

Then another company will come in and make the same product but better than the incumbent. The cycle continues.

My point is find these new companies that are trying to get market share by making a higher quality product. And if you really like that product, buy 2.

Chasing eternal profit growth isn’t a fact of life, notwithstanding the mythology of commodification. Neither are all investors motivated purely by profit. Neither is it clear that everything can be improved upon (much less that outsiders can improve on it better than the incumbent). Sometimes “do a thing, do it with excellence, make a modest living from it” is enough.

One thing I like about Mr. Sapp’s work at Worse On Purpose here—he (or perhaps his LLM, or perhaps he’s LLM) gives considerable attention to firms that don’t do it that way. Where:

> Quality, ownership, and stewardship all check out. […] Most of these are family-owned, trust-owned, employee-owned, or publicly traded with a long track record of not selling out.

It’s useful to have actionable alternatives, and I put more stock in his organizing thesis given how well its brand preferences line up with my own.

https://ledger.worseonpurpose.com/status/approved

https://ledger.worseonpurpose.com/methodology

Once a product becomes so big it cannot increase in market share the only way to increase the total amount of profit it generates it by reducing the cost to produce the product or increasing the price.