Their game is survival. Their original data business is under heavy attack from smaller companies and the cloud providers. They had to pivot somewhere and the cloud business looks like a natural direction for them. They play the role of the disruptor here. They offer significantly lower traffic fees than the rest. That's why they attracted Zoom and similar companies which require high traffic.
The biggest difference is not the morality of the management of the two types of companies, but the type of business they are into.
Many private companies are growth businesses. On the opposite side, private equity targets businesses which are stable, but not growing or declining. PE looks for products which have high cost to switch or products with no alternatives.
So when private equity buys the business they extract money in 3 ways:
- Raise their prices. This is similar to the public companies, but they do it more aggressively, because their customers don't have a choice. For reference see, what VMWare did after it was bought by Broadcom (Broadcom is a public company which acts as a private equity).
- Reduce costs, via layoffs and cutting smaller products. Also done by public companies, but the difference here is the magnitude. It is quite common for Private equity owned companies to have several years of 20% layoffs, until the original workers are completely replaced by workers in cheaper locations. Or not replaced at all which leads to a worse service.
- And finally the third way a private equity extracts money from the acquired company by providing "services". Employees from the PE company are elected on the board of directors of the acquired company. A PE executive can become a CEO of an acquired company. PE companies have satellite companies, which provide legal, administrative and financial services to their companies.
On top of that the acquired company has to pay the loan which was used to be acquired.
There should already be a single priority for a company...
Why is the bar so low for the billionaire magnate fuck ups? Might as well implement workplace democracy and be done with it, it can't be any worse for the company and at least the workers understand what needs to be done.
2. Some people have become very tied to the memory ChatGPT has of them.
3. Inertia is powerful. They just have to stay close enough to competitors to retain people, even if they aren’t “winning” at a given point in time.
4. The harness for their models is also incredibly important. A big reason I continue to use Claude Code is that the tooling is so much better than Codex. Similarly, nothing comes close to ChatGPT when it comes to search (maybe other deep research offerings might, but they’re much slower).
These are all pretty powerful ways that ChatGPT gets new users and retains them beyond just having the best models.
Evernote was in decline in more than 5 years before their sale to Bending Spoons. The sale didn't improve anything, because Bending Spoons act as private equity. They layoffs, moving the job to cheaper locations and increasing the prices.
For all the shit that PE gets, what you described is probably the best outcome possible from the POV of shareholders. If done well it should increase earnings per share. It's perhaps the best you can hope for in a situation where the company has been in decline for 5 years and you have no levers to effect change as a small shareholder.
This only works profitably because the users let themselves be stepped on, of course. But then again users who put their notes into a remote company's computer are those kind of people.
The housing prices and the rents are extremely high right now. Everyone who bought in the last 3 years, doesn't have much room to work for a lower wages.
In addition to that health care will become more expensive, the student loans will resume, etc, etc.
