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Does enshitification happen because companies are publicly-traded? (beehaw.org)

submitted 4 months ago by [email protected] to c/[email protected]

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Isn't that a prerequisite for enshitification? Publicly-traded companies are required (by law, I think) to maximize profits for their shareholders, even if that means utterly ruining their original product (Reddit, Boeing, etc.), yes? What do you think?

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[–] [email protected] 15 points 4 months ago* (last edited 4 months ago) (1 children)

I've worked for a couple startups and you're absolutely right. If you make a profit you pay taxes on that money, so startups like to spend most of the money they bring in. They also want to show revenue growth, since that's what investors like to see. You grow revenue by getting more paying customers. And you do that by doing what your customers want.

When you go public, your goal is to increase shareholder value. So you do this by reducing costs and finding ways to wring customers out of revenue. You find ways to nickle and dime customers out of revenue so much you develop an entire branch of law devoted to you suing your customers

[–] [email protected] 1 points 4 months ago

I knew that link was going to be something related to Oracle, and I was not wrong. xD