"We Weren't Evil!"
November 4, 2010 10:31 AM   Subscribe

Is there an accepted expression or term that communicates when a corporation or capitalist venture jumps the shark?

Everything and everyone has a shark to jump. This is widely understood. A good, solid shark-jumping is part of the circle of life, and we've developed a wide range of expressions to describe it throughout our history. It applies to life arcs (where the expression is probably gone over the hill), it applies to creative arcs (when an artist or band sells out two or three albums after that sophomore slump), and, I've noticed, the concept can often apply to capitalist ventures or businesses that lose their way after finding success. I'll try to describe that arc as I see it:
  • a marketable idea or an unsatisfied need is discovered
  • product brought to market for the genuine purpose of satisfying need, inspiring creativity, ending world hunger, makin' a bit of bread, etc
  • "Don't Be Evil!"
  • product generates totally idiotic amounts of income
  • a board of directors begins dictating direction of company, begins rolling out parallel products taking advantage of newfound brand recognition, begins making small decisions here and there that satisfy short-term bottom line needs but gently undermine long-term success of the product or company
  • the success continues unabated and the company begins to feel invincible, like it has a right to exist
  • uh-oh! This is the moment! The corporate shark is jumped! "Don't Be Evil!"
  • fun ensues. DRM happens. Rainforests are cut down. WiFi data is stolen. Lobbyists begin to outnumber engineers. Etc.
I'm sure this has always been a capitalist arc, but I'm seeing it all too often these days (mostly because I'm more alive these days than I was a hundred years ago... this is a bias, I know), and to corporations whose products I once (and still!) loved. It happens when a search engine turns into an I-own-you engine. It happens when gardens get walled. it happens anytime someone sees the exit ramp sign that says EXIT 102 THE LOW ROAD 1/4MI and decides to turn the wheel.

So, this isn't so much a shark-jumping question as it is an inquiry about the existence of an economic term describing a formerly innovation-focused corporation/enterprise becoming one wholly devoted to its bottom line due to the inescapable effects of great success on the collective corporate ego. As much as I'd like to, I haven't taken courses in economics and I'm curious and I'm sick of saying "jumped the corporate shark". Sorry about the ramble. Thanks!
posted by tapesonthefloor to Society & Culture (11 answers total) 1 user marked this as a favorite
One general concept that might be useful is "rent seeking". See also this article that's been making the rounds lately.
posted by mhum at 11:00 AM on November 4, 2010 [1 favorite]

So basically your examples mean you're talking about Google's progress from startup to corporate behemoth. But I think if you were to generalize them, you'd be something more like this:

  • A marketable idea or an unsatisfied need is discovered by a person or small group of people.

  • A product brought to market by said small group of people with minimal supervision or overhead.

  • The product catches on, generating more revenues and requiring additional manpower.

  • The organization starts generating enough money and requiring enough institutional infrastructure that Legal and HR become departments the company actually needs.

  • The original small group of people gradually either lose their influence or leave the company as the company transforms from three guys in a garage to three hundred employees in a commercial campus.

  • Around this point, the company may go public, giving shareholders some control of the company where previously it had vested entirely with internal executives, many of whom may have been part of the original group.

  • Seems to me like that's the process you're talking about. And I think the problem is simply one of scale. It's possible for a small group of people to run a virtuous organization with a minimum of overhead or formality. Three guys in a garage who buy parts from Radio Shack or computers from Best Buy and who basically make products/write code all day can basically run things by the seat of their pants. But once you start talking about hiring employees, you start needing office space and benefit plans. Once you start setting up standing accounts with suppliers you need corporate contracts. Once you grow beyond the point where you can sell as much of the product as you can make simply by relying on word-of-mouth advertising, you need a marketing department. Once you have enough assets so that a lawsuit could actually cost you a lot of money, you need both insurance and a legal department.

    This isn't necessarily about obsessive devotion to the bottom line. It's simply about growth. Certain things just don't scale very well.

    In other words, as soon as an organization grows beyond the point where one person or a small group of people can no longer do everything that needs to be done, you have an institution with procedures, formalities, and all the bureaucratic bullshit that goes along with it.

    As far as a name for the particular point where that happens, I think "maturity" might be what you're looking for, i.e. what happens when companies transition from doing things on an ad hoc basis with little planning to establishing regular procedures and protocols based on more-or-less extensive planning.
    posted by valkyryn at 11:03 AM on November 4, 2010 [1 favorite]

    I'd call that process bloat, feature creep, or ossification. None of those are strictly economic, though. To be honest, what you're describing seems like the default corporate path unless the business specifically turns away from it as firmly as possible.

    And it's natural progression. The bigger you get, the more exotic your options. Economies of scale work in strange ways, and corporate culture tends to be very self-concerned. Once you're at the top, you no longer worry about losing everything--even if the company slowly dies, the corporate powers that be have made enough money to live off the interest of their investments if they so choose. And without the specter of failure, priorities are altered.
    posted by Phyltre at 11:08 AM on November 4, 2010

    It sounds like the initiation of bureaucracy in an organization which was previously freeform. So a term might be "they went bureaucrat".
    posted by CathyG at 11:22 AM on November 4, 2010

    "They sold out" might do it. Usually used to describe artists, but I think it could be applicable to a business.
    posted by galadriel at 11:30 AM on November 4, 2010

    Response by poster: It might indeed, Galadriel, because I do see it as being more about incentive than about staff or bureaucracy, though I definitely hear what valkyryn and Phyltre are saying about how idealism doesn't scale.

    Perhaps it was a stupid question. I'd love to create a term for this, though, if it doesn't exist, santorum-style.
    posted by tapesonthefloor at 11:50 AM on November 4, 2010

    "lost their way."
    posted by zippy at 12:22 PM on November 4, 2010

    Also, as the company expands there is more diversity of ideas. While the founders may have one idea about what is the "right" thing to do (and that will obviously guide the early days), they don't micromanage every decision when the company becomes very large, and other employees who may have far different beliefs will do so. In Silicon Valley you tend to find that the founder-types are the most idealistic (especially the ones on their second company, but cynical me says it's easy to be idealistic when you're rich). After all, no one agrees which companies are "evil" or not, _even inside the companies themselves_.
    posted by wildcrdj at 12:48 PM on November 4, 2010

    Er, I forgot the part that addresses the question: the closest to a term I've heard in the valley is that pretty much everyone seems to refer to this as "not wanting to become Microsoft".

    (I don't think MS is evil, but many people here do)
    posted by wildcrdj at 12:51 PM on November 4, 2010

    "Eaten by the money monster?" I think that's what I'd call it. Or just "gone corporate evil."

    The tricky thing about making up a term is making sure that the general population knows what to translate it as. I could call it a "whatchamahootchie", but nobody knows what that is. (I want to make up a term for something too and have run into this problem.) So you have to come up with something where people have enough context to know what you meant.

    "Jumped the corporate shark?"
    posted by jenfullmoon at 5:55 PM on November 4, 2010

    As you may have noticed, the business section of any bookstore is usually booming, and there are any number of books focused on this essential question, such as Geoffrey Moore's Dealing with Darwin. (Apart from a period about a decade ago, these aren't the type of books I read, so I can't give you any thumbs-up or -down recommendations.)

    As to a term, probably most often you'll see in a neutral-to-negative sense is "past its prime" or "peaked". For nastiness, there's "dinosaur" [ex.], although this precisely describes a company unable to adapt. In a more desirable, positive (and non-slangy) sense, you'll see "mature" [ex.].

    Particularly in Silicon Valley and other technology-based companies, there's a well-known tipping point surrounding the taking of funding. I remember, if I do so correctly, Mena Trott of Six Apart describing a venture capitalist asking her if she wanted to continue to run a "lifestyle company" (there is such a term: it means one that will support the founders and maybe a few employees, but not grow past a certain point) or create a business that would give many people the means to support a middle-class lifestyle. That by itself is one definition of maturity.
    posted by dhartung at 9:39 PM on November 4, 2010

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