Writing this from the back of an uber. It seems like there is a recurring business model whereby new tech companies find a clear cut issue that isn’t being addressed in a given market, create a solve, and then abandon their original business model to revert back to what the market originally offered, which in turn makes their solution no better than what the market offered before they entered.
Example I: uber. When uber was first founded the drivers were heavily diligenced, they spoke English, the cars were pristine, and they didn’t have any horrible odors. As I type this from the back of an uber, my driver clearly hasn’t showered or applied deo in 48+ hours, is blasting what appears to be an audiobook in Arabic, and the car as the same feel and shape of the staple yellow taxi cab. The only true differentiator is the app vs dialing a phone number. To the older generation on WSO, is this me being overly critical, or is it spot on? Has uber deteriorated into the same low quality, shit service that yellow taxi cabs previously provided? I have had uber drivings WATCHING TV propped up on their dash while sports gambling off their phone in parallel. Don’t get me wrong, college me would call this man a genius, but when I’m on the highway and my wife is in the car I find this to be deeply disturbing.
Example II: Most entertainment streaming apps (excl. Netflix and Max, from what I understand). The entire purpose was to provide entertainment without suffering through ads, and to be able to pay for the content that intrerests you. Now, half the streaming services all offer ads (Prime, Disney, Paramount, etc - please correct me if I’m wrong on any of these, I don’t watch TV often). Not only do they offer ads, but many are becoming large conglomerates trying to pander to every possible thing you could be interested in watching, further adding unnecessary cost to the average user. Examples of this include Thursday night football through Prime. And yes you can pay 2-3x for the same service for no ads, but at what cost? 2-3 services and you’re paying more than for basic cable, so are we really any better off here?
Example III: Search Engines (Google). Google was founded to provide users with the most precise way to find what they were looking for across all of the internet. Now Google, alongside all other scale search engines, spits out links to whichever customer pays the most for the top spot (s) based on user search criteria. While there are some exceptions, such as when you search for specific tech problems and it genuinely does spit out a number of relevant solves, much of Googles search optimization is so revenue driven that it does appear to have forgotten what its mission statement was.
So my question to you all, is am I merely a cynic who takes tech advancement for granted, or are these businesses actually reverting back to intentionally adopting the same problems they originally set out to combat?
Trending Content - Off Topic Forum
Career Resources
Based on the most insightful WSO discussions, your observations about tech companies reverting to the very issues they initially sought to solve are spot on. Let’s break it down:
Example I: Uber
When Uber launched, it disrupted the taxi industry by offering a superior experience—clean cars, professional drivers, and a seamless app interface. However, as Uber scaled, maintaining those standards became challenging. The focus shifted from quality to growth and cost-cutting, leading to a service that, in many cases, mirrors the traditional taxi experience it aimed to replace. Complaints about driver professionalism, vehicle quality, and safety have become increasingly common, echoing the very issues that plagued the old taxi model. This is a classic case of a company prioritizing scale over its original value proposition.
Example II: Streaming Services
Streaming platforms like Prime Video, Disney+, and Paramount+ initially promised ad-free, on-demand content as an alternative to cable. However, as competition intensified and profitability became a concern, many introduced ad-supported tiers and bundled content, effectively recreating the cable model they disrupted. The result? Users now face higher costs and a fragmented content landscape, which undermines the simplicity and affordability that streaming once offered. Your comparison to basic cable is valid—many users are questioning whether the streaming revolution has come full circle.
Example III: Google and Search Engines
Google’s mission to "organize the world's information and make it universally accessible and useful" has been overshadowed by its ad-driven business model. Paid search results often dominate the top spots, and while the platform still delivers value in specific scenarios (e.g., technical queries), the user experience has become increasingly commercialized. This shift reflects a broader trend where monetization takes precedence over user-centric innovation, diluting the original purpose of the service.
The Bigger Picture
Your critique highlights a recurring pattern in tech: as companies mature, they often prioritize profitability and scale over their founding principles. This isn’t just cynicism—it’s a reflection of how market pressures and shareholder demands shape business decisions. While these companies have undeniably transformed their respective industries, their evolution often leads to compromises that erode the very advantages that made them disruptive in the first place.
So no, you’re not being overly critical. Many WSO users would agree that these companies, while still innovative, have drifted from their original missions in pursuit of growth and revenue. The question is whether this is an inevitable consequence of scaling or if there’s a way to balance innovation with sustainability.
Sources: Big Tech 2.0, Aging in Dog Years? The Short, Glorious Life of a Successful Tech Company!, Do Startup Tech Companies Have Too Much Power?, Why Travis, why, Big Tech Fall Hard | The Daily Peel | 10/27/22
The goal of these companies is to maximize value for shareholders.....
Uber got hit by heavy regulation, lawsuits, and could only afford to disintermediate cabs in a significant way when they were burning mountains of cash (+ Covid killed Uber Pool). They're still considerably more convenient and arguably safer than some random taxi. But I do oh so fondly remember the college days of taking a $1 Uber/Lyft pool to a party w/ the credits they gave to new users.
Netflix adding ads (that are maybe 30% or less as long as traditional commercial programming) as a low-cost option makes perfect sense. There's still an ad-free tier. I wouldn't blame them for the state of the product, every big content-owner decided to create their own streaming service after seeing how profitable Netflix became just from licensing their content. It's the old guard's fault we've basically reverted to a mix of services that bundled together closely resemble cable (which, frankly, is a "better" business model which of course wins out over those that refuse to monetize).
Google had to monetize and even with the ad game are still a great search engine, top 2 in the market for most regular content but of course they've got political leanings internally that corrupt what they're willing to show/how they choose to censor. The mission statements of startups almost always fall to the wayside once they become big corporates - remember Google also used to have the motto "Don't be evil" but that went away a long time ago. Money changes things.
You're not a cynic, but I don't think you're being fair either. Barring government interference, it's not accurate to say tech companies intentionally "revert" back to what was previously in the market. The market decided what was the better business model from a cash generation/growth standpoint and they were forced to adjust accordingly.
Good take - natural market forces largely dictated the reversion. I would add, however, that NFL games through Netflix or Prime is an attempt to stretch their position in the market and exploit their customers. It’s an abusive tactic that I hope did not pay off.
Furthermore, I think this SuperBowl and all of its theatrics is evidence of a greater push to solidify that day as some national holiday for the country. But I don’t see it as having its grip on American society as it once did. I think they inherently know this and are trying to create perceptions of greatness or specialty, as evidenced with the dramatic overly expensed Super Bowl production this year. However, the Lions thanksgiving game on Netflix was their attempt at squeezing profit and seeing what they could get away with.
Overall, I think we all now know that the world we live in is much too serious for treating the Super Bowl like Christmas and leaving our psychological development to the Conglomerates. I think the return to the principled serious life is imminent. Who gives a fuck about the Super Bowl anyway?
I think the push for live events is an interesting move, I don't actually hate it. You pay for the streaming library, but the infrastructure for live streaming is meaningfully different enough that it makes sense it's presented as a separate offering.
Re: SuperBowl not having the same grip on society, that's an easy explanation.
That said, I didn't even watch it this year because I think football is boring lol. Stopped caring after Brady retired.
Very well said, +1 SB.
I think you provide a strong counter to each of these points, and ultimately Uber is still superior (however, much less so than it was in its prime) than what it sought to replace. Safey and convenience at the very least have increased significantly. The anecdotal data points Ive described suggesting dangerous drivers are still outliers at least.
I think ultimately you (and many others) have indicated that as these companies scale, it becomes more about P&L prioritization vs. innovation and superior solutions. Your example of Netflix's low cost option suggests that if thats what the market wants, thats what the companies simply have to offer. Cant say Im not disappointed though. The counter argument would be that I could just leverage Uber Black, and the premium no ad versions of each streaming service, as these options still exist, they are just admittedly far more expensive now that they have become mainstream.
Maybe the key takeaway would be tech evolution is best before wide spread adoption has taken place and the businesses go public and margin expansion and increased market share become the core considerations for market improvement.
Just a bit of incoherent ramblings but your response really got me thinking.
100% they're still offering the same services but like you said, after they've maximized market share to a point (they'll rarely ever achieve 100% because of startup dynamics disintermediating them in certain markets) they have no choice but to convert from growth (the lowest cost, easiest to adopt model) to one that focuses on profitability (extracting the most value for the service from the largest # of consumers). All businesses make this shift at some point if they're truly successful.
The companies you mentioned or would seemingly refer to are now either:
a) Public, meaning their primary and ongoing purpose is to maximize shareholder value
b) Massive later stage private tech companies valued in the billions, which, due to their size, operate with the same shareholder value maximization outlook as public companies
For tech companies the chicken and egg dilemma revolves around balancing early-stage funding to enhance their product or service against the inevitable pressure to prioritize shareholder returns once they reach a certain scale
This is the fundamental chicken and egg problem for tech companies. If Z never gets the large funding rounds (2X, 5X, 10X$), Y remains underdeveloped, and Z often ends up being acquired by a larger, inefficient public tech company as a secondary function. If Z does get the large funding rounds, it eventually becomes that same inefficient, bloated public tech company it was trying to avoid being acquired by!
The key difference is that in the second scenario, VC/GE/PE investors profit along the way in the prospect of a bigger exit, which perpetuates the cycle; more capital gets funneled into new tech startups when they don't really need it, leading to the same outcome over and over again.
Bro I got hit by two DUI charges pre-uber. I lawyered up and got out of them, but since then Uber has saved my ass. Uber provides a pretty good service most of the time for me. I don’t meet smelly drivers like you have encountered … ever.
Ironically you explained capitalism, but hey at least shareholders are happy.
One of the less-discussed factors here is what you could call “tech adjacency”, for lack of a better term. Part of the reason that early-stage companies tend to have good products is not that they’ve discovered some magical special sauce but because both the people in the companies and their early customers are tech people and tech early adopters. Then, as the brand becomes better known and the company grows, both the employee base and the customer base degrade as they expand far beyond the initial tech people, and enshittification ensues.
Uber created a better way to hail cabs, but they didn’t have some unique formula for attracting high-quality drivers and maintaining clean cars. I think they just got the cream of the crop initially, as they were less well known and only people (typically smarter, higher-functioning people) who followed the tech industry were clued in about them. Likewise with their early ridership. Now everyone knows about them and they’re just cabs by another name.
The same thing was initially true of Airbnb. When it was new and cool, both the early hosts and the early guests tended to be higher-quality, tech-adjacent people. This created a nicer, higher-trust environment in which the guests could rely on nice stays with good people and the hosts could generally trust their guests not to wreak havoc. But then the platform expanded, and shittier hosts and guests entered and started to cause problems. That led to millions of new rules on both ends, a generally worse experience, and a declining brand.
A similar phenomenon has occurred with Amazon, whose seller network is so huge now that they have a hard time stopping the sale of illegal knockoffs or even stolen goods, and buyers can’t trust them as much anymore.
For pure software companies that don’t have huge networks of contractors, sellers, etc, the situation is a little different. But I do think the companies have better products while they’re still run by the initial generation of tech founders and strong early-stage tech employees. Then, as the companies get bloated, they add more and more non-technical and mediocre people who don’t care as much about the product, and the product slowly declines.
Uber started as a limousine/black car service initially, so the product enshittification was in large part by design.
I think streaming services will eventually go the way of cable packages - instead of buying a package of channels from your cable provider you’ll buy a package of streaming services from your ISP, and yes they will come with ads. We had a good run but moving away from binging and introducing ads was going to happen eventually - it sucks for consumers but it’s part of the path to increasing profitability.
The biggest one for me has been the evolution of Spotify. On many podcasts, during a given episode, I now get hit with Spotify's ads (overlaid on top of the podcast and skippable) as well as the podcaster's ads (readout during the podcast) and often times get blasted with social media plugs at the beginning or end. It has become insufferable and completely destroys the experience for me. Why the fuck am I soending money on a streaming app if I am going to get hit with 1-2 minutes worth of ads every 30 min?
Welcome to the need to SCALE in the 21st century. Never ending drive to revert everything to shit in the name of growth. Your driver shouldn’t even be in America, go back.
Perhaps these ideas/services were financed in an easy money era and were considered “growth” stocks that did not have to turn a profit but instead focus on growing and improving the user experience. Then investor patience runs out and they wan to see returns. So the companies start getting shitty to make money and we are back to where we started.
This is the answer. Easy money meant Netflix could charge $15/month for unlimited ad free streaming. They actually have to make money now. Same with uber and all the others.
Nothing has changed bud....It all comes down to their bottom line, and it is to make money for their shareholders. Starting off with uber, back then Ubers were good, affordable, good experience but they made no money. Now they suck, expensive, shitty experience but they make money now. Same with google ( unskippable ads and poor search quality) and Netflix( raising fees almost every 2 years). Shareholders first, experience second.
The more things change, the more they stay the same...
Is this honestly a surprise? The entire tech/VC industry from maybe 2015 on has been built on the idea that you raise a ton of money, drive the existing competition out of town by setting your first few equity raises on fire, IPO on the basis of some borderline fraudulent projections and assumptions, and then raise prices and lower service once you don't have any competition. That was always the "plot". Hard to think of a single tech company which hasn't utterly gutted its services and raised it's prices in the name of "growth" and that gets traced back to Wall Street.
If markets are going to punish responsibly run companies with long term outlooks in favor of piling into ones which promise slash and burn short term growth with no thought to the future, then obviously well run companies will falter and ones that offer the opportunity for mulcting customers and retail investors will have momentary booms. Rinse and repeat.
Cum qui sed qui consequatur ipsam officia aut. Rerum itaque et nostrum doloribus vel quod accusantium.
Qui dolores magnam voluptatem voluptatem. Nam quo earum aliquam qui. Dicta vero vitae maiores et vero. Voluptas in dolorem officiis esse velit delectus. Reprehenderit officiis eum vel deleniti numquam dolores. Necessitatibus dolor autem sed suscipit distinctio incidunt fuga.
Et velit dolor sit quia et. Modi et pariatur eligendi temporibus. Quasi ut tempore modi facere. Quas asperiores sint ut perspiciatis et adipisci qui est. Vel exercitationem eius similique. Placeat dolorem at consequuntur eius et sint. Aut rerum explicabo et quis esse.
Quo tempora sit et nisi vel. Sint impedit fugit nostrum asperiores.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Non consectetur sunt commodi omnis. Quasi repellat ipsum similique ab in. Eos est reprehenderit nemo et quibusdam. Ullam dolorem optio ex quibusdam corporis amet. Dignissimos hic eum voluptas impedit ea. Mollitia est consequatur est. Quis non atque vel ipsum.
Eaque corrupti et id optio et qui maxime id. Deserunt praesentium pariatur aut nesciunt sint accusantium.
Rerum iusto eum fugit facere accusamus sit debitis blanditiis. Vitae sequi sequi velit cumque cum sapiente et.
Praesentium vitae minus est ut. Voluptatem et illum provident harum consequatur ut. Inventore maxime pariatur perferendis sit. Possimus eum facere nihil doloribus ut et et.