DDH has a cult of personality, and Basecamp wouldn't be the same without it.
In the 1950s to the 1970s (when taking on debt was considered a sign of weakness, not the current "prerequisite for success" Wall St. convinced companies it is these days), there used to be this corporate ethos: "A decent amount of profit, a decent amount of the time."
The basic idea is that if you were making an "indecent" profit too often, you were engaging in 1 of 3 possible activities, each of which, despite seeming like a good idea in the short-term, would lead to ruin in the long-term: (1) You were fleecing your customers, leaving open a space for a less-greedy competitor to snatch your customers by replicating you at a lower price point (2) you were doing something illegal (Google "J.P. Morgan-owned ship caught with over $1 billion in street value worth of cocaine") or, (3) you were doing something that, while not "technically illegal", was probably not in your company's long-term best interest (for example, when it was discovered that Disney bought out companies that ran production studios that made "erotica" for cable TV channels, "because it was profitable, so, "Why not?").
That ethos was healthy and realized that business is NOT a "dog eat dog, law of the jungle" world but rather an ECOSYSTEM that needs to be maintained in balance for the long-term good of everyone involved, INCLUDING "competitors".
Yes it sounds a bit like "collusion" signaling through market-mechanisms, but it was a GOOD collusion that ensured the long-term health of the overall landscape.
At some point in the late 70s and 80s, things like Malthusian-driven "Club of Rome" enclaves and "Peak Oil" scares (nowadays "Won't SOMEBODY think of the environment!?") gave rise to a culture where more and more "Pre-("Terminator") and Post-("The Last Man On Earth") apocalyptic SciFi films flooded the general consciousness, which seems to have affected a lot of things including the psyches of business executives who seemed to have adopted this "Everything is falling apart, so grab what you can, while you can!" attitude (Not necessarily true (https://en.wikipedia.org/wiki/Julian_Simon), but highly-profitable for Wall St. and an ever-sprawling cottage industry of NGOs).
Does it "have to be" this way? Obviously not, as at one point it clearly wasn't. But some folks at the top make a lot of money by maintaining the illusion that "Yes this is reality and there's nothing you can do about it ("Hate the game, not the player") except to try to find a knife or club and realize that you're stuck in (https://en.wikipedia.org/wiki/Battle_Royale_(film)) ... which ironically has come full circle and seems to be the dominant theme in even video games themselves these days, thus subtly subconsciously imprinting this narrative on a whole new generation.
Someone•3h ago
In the limit it becomes zero.
Because of that, I think few CEOs would be happy with it in the long term.
Yes, you may be profitable and the best in your branch of work and be the largest in your branch of work and be a good employer, but if you’re close to that point and see a smaller company in your branch of work grow and thus take market share, you should be concerned that they will out-compete you in the long term.
GWBullshit•1h ago
You then are, if you seek continuously-higher-and-higher profit margins, cornered in such a way that you have 1 of 3 options out (see my reply to the first poster above).
The fact that more and more companies (1) are so myopic they can't see this coming and (2) openly embrace 1 of those 3 options when they're eventually forced to is how, for example, we've arrive at a world where formerly "Don't be evil" Google has morphed into "SOMEBODY is going to make some extra money becoming CyberDyne Industries, and so "Why not us?".
Not saying what you said is not part of the consideration, but imagine the world your kids will grow up in if more and more companies behaved this way.