It's called Price Discovery, and it's how free markets are intended to work. If the price becomes too high, or the resulting service too low, money and business will flow elsewhere. It's not perfect, but it's better than someone dictating how markets are supposed to work.Originally Posted by 50/50
I have seen many large companies buy smaller ones and destroy the culture and uniqueness of the startup. That’s the curse of the herd MBA mindset. The saving grace is that something like 85% of startup founders sell out but go on to found a new startup. Innovative people gonna innovate.
Early 911S Registry # 2395
1973 Porsche 911S in ivory white 5sp MT
2015 Porsche Macan S in agate grey 7sp PDK
Come on Live.... we are all friends here.
86 Sport Purpose Carrera "O4"
Way too simplistic and makes too many assumptions... But I'll play.Scott, consider this: suppose you are able to sell your business to Porsche North America for a nice sum. You are happy because you can retire and don't have to worry about money. (Let's put aside the question whether you wouldn't be happier working on classic 911s instead of retiring.) Now all your customers will be a little sad, because they know that PCNA won't be able to maintain your quality of work and so the shop will eventually become average and lose what was special about it. Capitalism at its finest, but the net value to society of the sale is negative. That's why I'm often a little sad to see founders selling their business instead of maintaining it with the values that made it special. I think we all share an appreciation of long-term ownership here and this also applies to businesses, not just to cars, in my opinion.
(I'm a business owner myself and have no intention of selling.)
Perhaps a more likely scenario would be that PCNA acquires Scott's business and Scott's customers are a little sad because they may lose some of the personal touch that Scott brings to their dealings. BUT, with their immense resources and reach, PCNA is able to expand Scott's former business and service many multiples of new customers who, prior to the acquisition, had never heard of the business and who would never have enjoyed the services of the business if the business had not been acquired. So, a small group of customers is "a little sad" but a much larger group of customers has greatly benefited - a net benefit to society.
+1 Exactly
Nobody said anything about "decreasing he customer experience". The comment was that BaT's "fee amount and structure will most likely change and increase in the near term and continuously" to which I replied that "increased fees aren't automatically a bad thing for sellers". And, to answer your question, yes, increased fees will absolutely be a good thing for some of BaT's customers.
There was a huge gap between what everyone else (Bonhams, Sotheby's and most dealers) were charging and what BAT could charge and still be profitable due to their low on line costs. They found a market niche, tweaked the experience and very adeptly exploited it. Hearst wants to get in on that market and is willing to pay to do it. Will they screw it up? Based on history probably. They are a big, bureaucratic organization which doesn't really understand how smaller, nimble entrepreneurial companies work. Lots of committees and bureaucratic group think won't help. I'm sure they will increase prices, but at some point someone else will offer a better experience for an equal or lesser cost and business will migrate in their direction. It's called creative destruction, and it's how capitalism works. It's not always nice and there are casualties but it beats the alternatives. Does anyone remember My Space? Once Facebook offered a better experience they were obsoleted literally, overnight.
+2. When you've got a willing buyer and a willing seller, you've got a market!
The only way the buyer is going to do well on his investment, broadly speaking (and excluding financial engineering), is to make the business better and stronger. Absent compulsion, the only way to do that is to build the business. I hope they will.
But if not, someone else will come up with another nifty solution or platform, and we'll all be the beneficiaries of that!
The auctions bring the audience, low cost content you are actually being paid for...... Hell of a platform for advertising..... it should have bought big bucks..... I am guessing a 25X+ multiple.
86 Sport Purpose Carrera "O4"
John, that may not have been the best example to use. Scott's business depends on his "hands on " years of experience, when PCNA buys that business and expands it to more outlets and more people to do the greater amount of work what usually happens is that the 'new' supposed craftsmen can't suddenly have 30 years of experience, so the quality suffers. Much easier to pass on a business that isn't so dependent on 'hands on skills'
Early S Registry member #90
R Gruppe member #138
Fort Worth Tx.
Posting Permissions
Reply With Quote