Just finished a decade long expedition of starting my business, growing it with love & tears to an exit to a venture funded giant in the space, being on their leash for a few years, & getting laid off just this week. AMA why capitalism will self consume. And since I have some time now I can try to articulate what I think will replace it.
Because in the current form of capitalism, the CEOs & leaders at the top cannot correctly prioritize for long term. Their incentive structures (all the way from Wall St analysts down to CEOs & regional directors) are aligned only for quarterly growth metrics, even if they hurt the business less than a year or two later. The CEO gets a bonus for laying off 1000 people thereby making the business leaner & profitable this quarter, who cares about even the next quarter. They are short sighted, which is also clear from the assumption of endless growth from finite resources. I will also say that folks at the top (typically MBAs) are too data obsessed without understanding nuance of their own business model.
That checks out - the short sightedness of capitalists causes our economy to implode every few years. What do you mean about MBAs being too data obsessed?
Human minds are simple. We understand numbers, but not abstract patterns. We understand temperature, but not weather. If we try to view the world or businesses in just terms of data, we don’t capture / understand the real world. Real world is far too complex & nuanced to be captured with data & numbers. You have number for CAC (cost to acquire customer) but nothing for brand recognition. You have number for LTV (customer lifetime value) but nothing that explains their use case. You have number for customer retention & NPS (net promoter score), but nothing for customer loyalty. You have a number for MAU (monthly active users) but nothing that explains their breakdown or the relative importance of them to your business (for Reddit CEO for example, a top contributor and an AI bot are the same, which is one active user). We can only visualize things that have numbers, graphs, trends, top 10s. Anything that doesn’t have a number associated with it, plays no part in business decision making. It takes wisdom & humility to know the data might not be painting a true picture.
PS: take it from someone who’s been a numbers & data person all their life