Some truth about investment and growth

[kristianjohnsen]

This was part of an answer in the "big line array investment"-thread currently going on in the Varsity section.

I decided to post it here instead.




A lateral move can be a good move sometimes. Growth isn' always the appropriate move (Why does everyone need to "grow" anyway, are we this brainwashed by capitalism?). What is it that we wish to grow into? (probably that other, bigger company's market, is what). What about the clients we have now? What's wrong with them? They put us where we are now, remember... Growing to stay small and nimble and just increase the amount of business, rather than the size of the individual gigs, is often a good expansion.


Most smaller providers seem to have this "perpetual self-doubt syndrome" where they always want to expand into the territory of someone else that is bigger (and they feel like are the ones who "define the market").
But we should remember that the small/mid market is a lot bigger in sum than the big/giant market.


Us smaller providers are always being warned about how things get really difficult if we wish to expand into the bigger leagues. Nobody seems to even contemplate that it is equally difficult for bigger rental houses to "expand" downward into the smaller markets. Yes, they have the gear to do it, no sweat, but are they equipped/staffed/organized to make money doing it? Probably not.


As a smaller provider I carefully invest in gear that is good enough to keep me at the top level of the smaller market in terms of quality and reliability, yet not expensive enough to force me into changing markets just to keep things rolling.


Know your market and tailor your product to make money on the clients you have access to. This is what every sucessful conglomerate out there is doing right now: McDonalds aren't serving up gourmet food, and the gourmet places don't have the capacity to provide as many meals as the fast-food people. Both ends of the scale are making good money, with many opportunities inbetween.

 

[John Roberts]

Re: Some truth about investment and growth

This was part of an answer in the "big line array investment"-thread currently going on in the Varsity section.

I decided to post it here instead.




A lateral move can be a good move sometimes. Growth isn' always the appropriate move (Why does everyone need to "grow" anyway, are we this brainwashed by capitalism?). What is it that we wish to grow into? (probably that other, bigger company's market, is what). What about the clients we have now? What's wrong with them? They put us where we are now, remember...

While growth is embraced by big business (growth mitigates multiple internal weaknesses), I believe government is probably the larger advocate for growth, because only growth allows them to survive perpetual deficit spending. Just like growth can hide many weaknesses in business, in government it tolerates the waste and inefficiency as long as they can realize a few percent of GDP growth (anybody remember when we were growing a few percent?).

===I appreciate that the bad mouthing of capitalism is hip these days. To complete the image, make it a wealthy capitalist. In reality many capitalists (like me) are not wealthy at all. But this being thanksgiving weekend, I appreciate my blessings. (I guess I am wealthy after all). ======

Growing to stay small and nimble and just increase the amount of business, rather than the size of the individual gigs, is often a good expansion.

That just sounds like a different flavor of growth.

Most smaller providers seem to have this "perpetual self-doubt syndrome" where they always want to expand into the territory of someone else that is bigger (and they feel like are the ones who "define the market").
But we should remember that the small/mid market is a lot bigger in sum than the big/giant market.

The size of the total market doesn't matter much to the individual fish swimming in the school, other than to suggest an environment that "could" support another small business.

To consider growth one must analyze the business model. Some small business models, are self-limiting if say the owner-operator must do almost everything by himself/herself, and doesn't have an easily scalable operation.

Us smaller providers are always being warned about how things get really difficult if we wish to expand into the bigger leagues. Nobody seems to even contemplate that it is equally difficult for bigger rental houses to "expand" downward into the smaller markets. Yes, they have the gear to do it, no sweat, but are they equipped/staffed/organized to make money doing it? Probably not.


As a smaller provider I carefully invest in gear that is good enough to keep me at the top level of the smaller market in terms of quality and reliability, yet not expensive enough to force me into changing markets just to keep things rolling.


Know your market and tailor your product to make money on the clients you have access to. This is what every sucessful conglomerate out there is doing right now: McDonalds aren't serving up gourmet food, and the gourmet places don't have the capacity to provide as many meals as the fast-food people. Both ends of the scale are making good money, with many opportunities inbetween.

The MacDonalds vs. local specialty restaurant is a good example. The small provider can not possibly compete with MacDonalds on price so you better beat them on service and performance. Whether it's a good choice for a restaurant owner depends on the preferences of the local population. Luckily for small sound providers no major company has attempted to deliver sound reinforcement on a wide scale.

For extra credit you might want to ponder why that is?

JR

 

[Tim McCulloch]

Re: Some truth about investment and growth

This from a guy that bought a PM1D.

The reality is that even a mid-size line array requires very different logistics than a ground stacked conventional rig. The difference between them, besides some purchase price considerations, are labor and rigging.

Your comment about large firms not being able to handle small shows in a competitive (to small operators) is correct. At shops that do bigger shows as a matter of routine, everything is packaged and set up in ways that require stage hands, rigging points, trucks with ramps and venues that hopefully have loading docks. Brandon is in between already. Unless he can sell his Versarray rig for what he paid for it (possible, but doubtful), he's buying twice, for more money. He says his clients won't/can't pay more, so why is he increasing his cost of doing business? He MUST expand either his market area/customer base or find a way to charge his existing clients a higher fee. Or he'll be out of business in a couple of years.

As bigger firm that IS expanding downward, the issue is one of labor. If we're going to make a profit the gear has to be cheaper, sure, but the real issue is that a rig must be assembled, operated, and taken away by a single employee. When you add in lighting of any significance it's a long, hard day for that person and we have to pay them more; the savings come from not sending 2 other guys. But our overhead does not change: the cost of insurance, office, warehousing, taxes, permits and licenses remain the same or even go up. Part of the reason (in the US, anyway) small operators have lower costs is that they simply don't pay them. Insurance? What's that? Permits and licenses? Only if someone complains or there is an incident. Our accountant figured that most of the small operators in our area are dodging between 50%-70% of those types of expenses. It's a significant amount of money. Factor in that owner-workers are not required to have workman's compensation insurance or provide health insurance and there is a huge difference in operating costs.

 

[Brian jojade]

Re: Some truth about investment and growth

Don't confuse company growth with product offering growth. The two are not necessarily the same thing. If your product offering gets too wide and you can't keep each product busy enough, you will be in much worse shape than a company that specializes in one thing and does it well. If you want a great real life example of that, look at what Apple did in the 90's. They had expanded their product offerings very thin. They had over 100 products available for sale, with computers, servers, printers, scanners, etc. but weren't selling enough of any of them to make a profit. So they cut back to 4 items. Yes, they only had 4 product lines for quite a while. With that focus, they were able to get way better at what they do and obviously, the profit began to happen. Now, since then, they have adapted and expanded quite a bit, but it took that focus to know what their company actually was to make it happen.

With sound companies, the same thing can be true. Define your target market. Set up a budget. Make it work with as little gear as practical. Before expanding into a new market, make sure you can make it work on paper before buying any gear. That's how capitalists capitalize. I wish I'd have done that earlier on. It would have saved me a fortune.

 

[Jason Misterka]

Re: Some truth about investment and growth

Kristian -

Very good advice and an interesting issue that I've been thinking about a lot lately.

Us smaller providers are always being warned about how things get really difficult if we wish to expand into the bigger leagues. Nobody seems to even contemplate that it is equally difficult for bigger rental houses to "expand" downward into the smaller markets. Yes, they have the gear to do it, no sweat, but are they equipped/staffed/organized to make money doing it? Probably not.

This is very true. Whenever I look at the cost vs benefit of picking off gigs that are smaller than us, they never make sense given our structure, quality of equipment, and system packaging.

It is often tempting. More gigs equals more days work for our guys. $650 more $ for a night can be helpful for cash flow. But there is a big opportunity cost there. Not only would we be exposing our equipment to additional wear & tear, but would be opening ourselves up for additional liability, without a real $ reward attached. And, having your guys booked up on small gigs could be a good thing, but then half the time you end up wasting an A1's talents on a B gig, and when the A gig pops up you are scrambling for staff.

I spent a long while running the numbers to see if there was a smart way to do a "Lite" version of our company, for small events. A smaller inexpensive truck, a compact and manageable system that still achieves reasonable performance standards but is easily enough to load and deploy with only two people. And the only way I could make any of the numbers work was if the OWNER of the system was always the A1. Which would mean I would be wasting energy at little gigs that I should have been using for our regular clients. Having a loose partnership with a friendly, though smaller, company can be very handy for these situations.

To be clear, we still do little gigs. But we try to treat the clients at these gigs as we do the clients at our larger events. And just as importantly, we get paid well enough for them that it makes sense for us to do so, or otherwise we leave them be.

A lateral move can be a good move sometimes. Growth isn' always the appropriate move (Why does everyone need to "grow" anyway, are we this brainwashed by capitalism?). What is it that we wish to grow into? (probably that other, bigger company's market, is what). What about the clients we have now? What's wrong with them? They put us where we are now, remember... Growing to stay small and nimble and just increase the amount of business, rather than the size of the individual gigs, is often a good expansion.

The big issue I have found is that sometimes you have to grow to survive. Our clients that were OK 12 years ago with a point source system and Crest consoles are now requiring a name brand line-array and Profiles. The venue capacities haven't changed necessarily (though some of our clients have grown as well...) but the artist requirements have somewhat. Yes, quality equipment is a little less expensive maybe. It is certainly lighter and more efficient. But it is not that much less expensive than it used to be to meet riders


Jason


EDIT: wow I must be a slow writer. When I began typing this, there were no other replies

 

[John Chiara]

Re: Some truth about investment and growth

You nailed it. Around here bigger companies under bid local shows and provide sub par staff universally. The thing with small and mid sized shows is the provider most often ends up mixing the shows, with no one on staff that has a clue how to pull that off reliably and to a level that I believe the purchasers should have right to expect... Of course the purchasers have no clue about anything it seems these days. It is. It is hard just maintaining a position in that kind of market when budgets keep getting trimmed.

 

[Helge A. Bentsen]

Re: Some truth about investment and growth

Well, we are in for a fun ride

The biggest PA company in Norway(AVAB), with a office in Kristian's town, merged together with their office in Lillehammer, their sister company in Bergen and the second biggest company in Norway to one company. They are now owned by a Finnish holding company that also owns a Finnish company and a major Swedish company.
The third and fifth biggest companies just merged together in response to this.

I currently have enough work on my own to pay for my investments alongside some freelance work for others. I do not intend to grow(as in becoming bigger) for the time being, there's no way I can afford competing with these guys. But I will invest in some more stuff next year to replace old gear, satisfy my customer base and hopefully pick up some gigs that the bigger companies turn away.

I talked to a couple of guys that were around the last time two major players merged and their advice was to strengthen your own business, get hold of good crews and pick up those who turn away from the major players. Some customers will look other places for their rental needs because their gigs are too small for the major players or they want to stimulate competition. Last time around everybody believed that the major players would crush all others, instead a whole bunch of new companies appeared because the customers had different needs than the majors could offer or wanted to offer. I believe it will happen again.

 

[Tim McCulloch]

Re: Some truth about investment and growth

I spent a long while running the numbers to see if there was a smart way to do a "Lite" version of our company, for small events. A smaller inexpensive truck, a compact and manageable system that still achieves reasonable performance standards but is easily enough to load and deploy with only two people. And the only way I could make any of the numbers work was if the OWNER of the system was always the A1. Which would mean I would be wasting energy at little gigs that I should have been using for our regular clients. Having a loose partnership with a friendly, though smaller, company can be very handy for these situations.

To be clear, we still do little gigs. But we try to treat the clients at these gigs as we do the clients at our larger events. And just as importantly, we get paid well enough for them that it makes sense for us to do so, or otherwise we leave them be.

The big issue I have found is that sometimes you have to grow to survive. Our clients that were OK 12 years ago with a point source system and Crest consoles are now requiring a name brand line-array and Profiles. The venue capacities haven't changed necessarily (though some of our clients have grown as well...) but the artist requirements have somewhat. Yes, quality equipment is a little less expensive maybe. It is certainly lighter and more efficient. But it is not that much less expensive than it used to be to meet riders

Jason

Well put. Our "two guy" gigs are done by the boss. We make money on them because he's salaried and not day rate or hourly. We also know that our name is the same regardless of the scale or scope of a gig. Messing up a club gig is just as negative as have a problem at an arena show. Having the boss do those shows keeps the quality up and makes an impression on the client. We've picked up a couple of decent long term accounts that way.

Your last paragraph is spot on. A company needs to make enough to put back some funds for upgrades and as-yet unidentified expansion. And it's important to remember that capital equipment costs for a regional company have stayed pretty consistent over the last 25 years or so. If it took $350,000 to buy gear in 1988, it still does in 2012... but what we get for that money is vastly greater capability, output and sound quality. If a company is heavily invested in technology that is more than 10 years old, they are vulnerable to a firm with a bunch of "bright shiny objects."

 

[Tim McCulloch]

Re: Some truth about investment and growth

You nailed it. Around here bigger companies under bid local shows and provide sub par staff universally. The thing with small and mid sized shows is the provider most often ends up mixing the shows, with no one on staff that has a clue how to pull that off reliably and to a level that I believe the purchasers should have right to expect... Of course the purchasers have no clue about anything it seems these days. It is. It is hard just maintaining a position in that kind of market when budgets keep getting trimmed.

Hey John, if I move to Albany can I sleep on your couch? :lol:

You have a valid point about mixing. I know the quality of mixing is a pet peeve of yours. I know mixing is a skill that requires practice to keep fresh. How does a firm that mostly needs system guys do that? Sure, we can set up a Pro Tools playback and mix in the shop but that's not the same as being in an auditorium or club and having the band wailing away on stage. It's easy to train folks to put a rig together, but teaching live mixing? 'Tis a challenge.

 

[John Chiara]

Re: Some truth about investment and growth

Hey John, if I move to Albany can I sleep on your couch? :lol:

You have a valid point about mixing. I know the quality of mixing is a pet peeve of yours. I know mixing is a skill that requires practice to keep fresh. How does a firm that mostly needs system guys do that? Sure, we can set up a Pro Tools playback and mix in the shop but that's not the same as being in an auditorium or club and having the band wailing away on stage. It's easy to train folks to put a rig together, but teaching live mixing? 'Tis a challenge.

I have one assistant and I actively pass on studio tactics to him. In this day and age no one driving, moving and deploying gear as a fulltime job is gonna get any real mixing experience on the job. And here lies my other pet peeve. If you call yourself a mixer you need to PRACTICE!! No one gets better at anything without practice. So if guys/gals never mix except on the job how do they get better. Simple...they don't!
I see guys every week that have been mixing the same band on the same gear for 5,10,15 years!! These. Ands must be the best sounding bands on earth right? Guess again. The worst thing is that old bad habits that don't get fixed get passed along. I am not expecting anything but real mixers are like great ball players. There aren't that many for all the reasons jus stated. IMO...any live mixer that doesnt have studio access on a regular basis is cheating himself and everyone else. My current thrust is trying to sell that quality skill set as part of my small company package. Some people care, I now have a small core of clients that won't hire anyone else and much of that is the result of exuberant positive feedback from bands. A few weeks ago I did show in a local club that is at least the 2nd worst sounding room I have ever mixed in. The band was over the top about how good they thought it sounded. The lead singer stopped my on my way out and said...
"you just get it man...you get it!"Also, if a wannabe mixer doesn't know how to creatively use comps, gates, delays, reverbs..etc and blames it on the fact that the club won't supply them should Invest in themselves or not take offense when the obvious is pointed out...things that need to be done are not being done... Why should that fly when there is an obvious alternative? Geeez...I must own 20 reverbs! So I know how to make reverbs do what I want..isn't that part of the job?

Anyway, I would value advice on how to market the quality of a good mix engineer over a new line array with truck drivers operating them. I mix music everyday and always learn something useful. I spent 2 hours tonight changing a snare reverb...within the context of a mix just to get a better grasp of how highpassing and predelaying in time with the music canclear up the sound of the other drums in the kit. I helped my assistant Sat night with a 5 piece country band and showed him how sculpting the kick immediately resulted in clearer vocals.Crap, a lot of times I make mixing moves based on what I know should happen as general practice... Things like frequency layering and knowledge of different instruments fundamental frequencies and specific overtone characteristics.

Gotta sleep... I apologize for any misspelling my phone let slip or created on its own!

 

[kristianjohnsen]

Re: Some truth about investment and growth

While growth is embraced by big business (growth mitigates multiple internal weaknesses), I believe government is probably the larger advocate for growth, because only growth allows them to survive perpetual deficit spending. Just like growth can hide many weaknesses in business, in government it tolerates the waste and inefficiency as long as they can realize a few percent of GDP growth (anybody remember when we were growing a few percent?).

===I appreciate that the bad mouthing of capitalism is hip these days. To complete the image, make it a wealthy capitalist. In reality many capitalists (like me) are not wealthy at all. But this being thanksgiving weekend, I appreciate my blessings. (I guess I am wealthy after all). ======

Good points. I figure I'll try to discuss sound companies more than government in this thread for now, though

That just sounds like a different flavor of growth.

Or....it sounds more like an airline running a campaign to fill every seat on already existing flights - as opposed to buying new planes and starting to fly to new (to them) airports...

The size of the total market doesn't matter much to the individual fish swimming in the school, other than to suggest an environment that "could" support another small business.

It matters to they guy on the pier with a pole and some bait!

To consider growth one must analyze the business model. Some small business models, are self-limiting if say the owner-operator must do almost everything by himself/herself, and doesn't have an easily scalable operation.

One of my points earlier on that I have been given some confirmation on is that these limiting factors in growth work both upward and downward.

The MacDonalds vs. local specialty restaurant is a good example. The small provider can not possibly compete with MacDonalds on price so you better beat them on service and performance. Whether it's a good choice for a restaurant owner depends on the preferences of the local population. Luckily for small sound providers no major company has attempted to deliver sound reinforcement on a wide scale.


JR

I also sincerely believe that the business we (us sound providers) work in is slightly different from many other businesses. Remember that we are factoring in things like artistic skills and dealing with nervous amateurs. For some clients in my market, things like being able to reach the tech at ten the night before the show for some reassurance before they go to bed counts a lot. This is just an example, but "small-timers" sometimes get very good at this stuff (the human factor).

For extra credit you might want to ponder why that is?

JR

Not really looking for extra credit other than what I can stick in the bank ~:-D~:grin:

 

[kristianjohnsen]

Re: Some truth about investment and growth

This from a guy that bought a PM1D.

Touché.

Well, that purchase was a bit of a fluke. Certainly not a typical "club mixer".
For my operation it was time to get a mixer with more facilities than our SeriesTWO to accomodate the "big shows" (for us that would be 500-700ish people) and something like an MH3 with all the goodies was in the running when that PM1D appeared at the right price. Turns out it was a good choice for many reasons to buy the big digital instead.
This is an entirely different discussion, but "gear hysteria" has gone slightly overboard here and you'd be surprised at what kinds of small clubs have something like an MH3...

The reality is that even a mid-size line array requires very different logistics than a ground stacked conventional rig. The difference between them, besides some purchase price considerations, are labor and rigging.

I'm going to say that there are several other differences, also.
Here's one example: A number one consideration for me when considering speakers (we are all self-powered at the moment) is "scaleability".

Right now, our "big" PA can be split into many small systems. We can use the wedges from the big setup as frontfill/delay or as mains for smaller systems together with subs "stolen" from the big PA. The subs from the big PA even work as drumfill subs together with one of the wedges, etc, etc.

The "big name rider friendly big show gear" typically isn't made like this - for a good reason (a Ferrari doesn't have a trailer hitch, either ~:-D~:grin.
My level of gear excludes us from bidding on the "Ferrari-shows" but it makes up for it (for me) by making it easier to make a few dollars off of the "Ford/VW/Nissan/Toyota-shows" (why do we always end up with cars?).

Brandon is in between already. Unless he can sell his Versarray rig for what he paid for it (possible, but doubtful), he's buying twice, for more money. He says his clients won't/can't pay more, so why is he increasing his cost of doing business? He MUST expand either his market area/customer base or find a way to charge his existing clients a higher fee. Or he'll be out of business in a couple of years.

Not knowing the state of that rig (and not really wanting to discuss that one purchase in particular) all I am meaning to say is that sometimes when it's time to get a new company van, getting one that does exactly what the last one does, could make sense. If the old one did the job, but was getting unreliable/too thirsty/cumbersome/etc, the change might still be perfectly worthwhile (again with the cars).

As bigger firm that IS expanding downward, the issue is one of labor. If we're going to make a profit the gear has to be cheaper, sure, but the real issue is that a rig must be assembled, operated, and taken away by a single employee. When you add in lighting of any significance it's a long, hard day for that person and we have to pay them more; the savings come from not sending 2 other guys. But our overhead does not change: the cost of insurance, office, warehousing, taxes, permits and licenses remain the same or even go up. Part of the reason (in the US, anyway) small operators have lower costs is that they simply don't pay them. Insurance? What's that? Permits and licenses? Only if someone complains or there is an incident. Our accountant figured that most of the small operators in our area are dodging between 50%-70% of those types of expenses. It's a significant amount of money. Factor in that owner-workers are not required to have workman's compensation insurance or provide health insurance and there is a huge difference in operating costs.

All I can say is that even when I was just a kid with some old Peavey gear in an unheated shack, I actually had insurance (I guess I was just taught that way).

As my business has grown, so have the overheads, but that's OK, the growth has been fueled by an increased amount of available gigs, not the other way around. The "next level" is such a big step up that I don't find it worthwhile, besides, I really like the work I have now (lucky guy, I guess) For now I think I'll stay within the environment I have tuned my machinery to operate well in (and this is what I'd suggest the line-array purchaser in the other thread considers, too).

 

[kristianjohnsen]

Re: Some truth about investment and growth

Don't confuse company growth with product offering growth. The two are not necessarily the same thing. If your product offering gets too wide and you can't keep each product busy enough, you will be in much worse shape than a company that specializes in one thing and does it well.

Thank you for perfectly expressing one of the points I was wishing to be clearer on!

Make it work with as little gear as practical. Before expanding into a new market, make sure you can make it work on paper before buying any gear. That's how capitalists capitalize. I wish I'd have done that earlier on. It would have saved me a fortune.

Also, having gear that may be combined in many different ways for many different gigs can be a real life-saver for the small operator. If this gear selection excludes him from certain types of work, so be it, IMO.

 

[kristianjohnsen]

Re: Some truth about investment and growth

Kristian -

Very good advice and an interesting issue that I've been thinking about a lot lately.






This is very true. Whenever I look at the cost vs benefit of picking off gigs that are smaller than us, they never make sense given our structure, quality of equipment, and system packaging.

It is often tempting. More gigs equals more days work for our guys. $650 more $ for a night can be helpful for cash flow. But there is a big opportunity cost there. Not only would we be exposing our equipment to additional wear & tear, but would be opening ourselves up for additional liability, without a real $ reward attached. And, having your guys booked up on small gigs could be a good thing, but then half the time you end up wasting an A1's talents on a B gig, and when the A gig pops up you are scrambling for staff.

I spent a long while running the numbers to see if there was a smart way to do a "Lite" version of our company, for small events. A smaller inexpensive truck, a compact and manageable system that still achieves reasonable performance standards but is easily enough to load and deploy with only two people. And the only way I could make any of the numbers work was if the OWNER of the system was always the A1. Which would mean I would be wasting energy at little gigs that I should have been using for our regular clients. Having a loose partnership with a friendly, though smaller, company can be very handy for these situations.

To be clear, we still do little gigs. But we try to treat the clients at these gigs as we do the clients at our larger events. And just as importantly, we get paid well enough for them that it makes sense for us to do so, or otherwise we leave them be.

Thank you for your compliment and thank you for sharing your perspective from (what sounds like) a larger operation than mine.

The big issue I have found is that sometimes you have to grow to survive. Our clients that were OK 12 years ago with a point source system and Crest consoles are now requiring a name brand line-array and Profiles. The venue capacities haven't changed necessarily (though some of our clients have grown as well...) but the artist requirements have somewhat. Yes, quality equipment is a little less expensive maybe. It is certainly lighter and more efficient. But it is not that much less expensive than it used to be to meet riders


Jason

I certainly would not be in business if I never upgraded from those Peavey SP2s I mentioned earlier, so I agree ~:-D~:grin:.

I have also found that "growing with the clients" can be a factor.

I have experienced that as a small operator working with many amateurs within the arts (like theatre or live music) I have often been able to "create work" by raising awareness about what possibilities are out there, or even helping the client grow into something bigger than they were, so that their needs increase.

(I know this goes against the whole "the market is a finite entity and every meal you eat is coming off another provider's table"-school of thought, but so be it).

 

[kristianjohnsen]

Re: Some truth about investment and growth

Well, we are in for a fun ride

The biggest PA company in Norway(AVAB), with a office in Kristian's town, merged together with their office in Lillehammer, their sister company in Bergen and the second biggest company in Norway to one company. They are now owned by a Finnish holding company that also owns a Finnish company and a major Swedish company.
The third and fifth biggest companies just merged together in response to this.

I currently have enough work on my own to pay for my investments alongside some freelance work for others. I do not intend to grow(as in becoming bigger) for the time being, there's no way I can afford competing with these guys. But I will invest in some more stuff next year to replace old gear, satisfy my customer base and hopefully pick up some gigs that the bigger companies turn away.

I talked to a couple of guys that were around the last time two major players merged and their advice was to strengthen your own business, get hold of good crews and pick up those who turn away from the major players. Some customers will look other places for their rental needs because their gigs are too small for the major players or they want to stimulate competition. Last time around everybody believed that the major players would crush all others, instead a whole bunch of new companies appeared because the customers had different needs than the majors could offer or wanted to offer. I believe it will happen again.

Helge.

Interesting times in Norway, too.

I think we'll both be fine if we manage not to be carried away and stick to what we do really well!

 

[Jack Arnott]

Re: Some truth about investment and growth

(Why does everyone need to "grow" anyway, are we this brainwashed by capitalism?)

I remember seeing a t-shirt in 1993 that made an impression on me.

"Growth for the sake of growth is the ideology of the cancer cell."

Found out later that it is an Edward Abbey line.

 

[John Roberts]

Re: Some truth about investment and growth

I remember seeing a t-shirt in 1993 that made an impression on me.

"Growth for the sake of growth is the ideology of the cancer cell."

Found out later that it is an Edward Abbey line.

While cancer does not have an ideology per se, it is the result of a failure of our cellular self-regulatory programmed cell death (apoptosis) of rouge random cell variants. This unchecked growth, of the wrong cells in the wrong place is a somewhat simplistic but adequate definition of that pervasive scourge on us all, as we cheat death from other causes.

One could argue that cancer is a failure of "regulation", and it is frustrating how something so simple in concept eludes a remedy. It makes you think maybe we aren't supposed to live forever (while cancer can attack young people too).

As long as we are on a biology veer, it is perhaps interesting (and a little scary) to consider the rise of drug resistant TB. Too many years of treatment with drugs that didn't completely kill TB, created an opportunity for the few resistant microbes to strengthen free of competition from the other common TB strains. Anybody still not believe in evolution? Maybe momma needs to rethink overuse of those disinfectant wipes... let the harmless bacteria dominate and eat all the food so the really nasty new bugs can't get a foothold.

JR

PS: cancer sucks. :-(

PPS: a comprehensive philosophical inspection of this is long and twisted.... but the parallel is obvious so enjoy.

 

[Dick Rees]

Re: Some truth about investment and growth

As long as we are on a biology veer, it is perhaps interesting (and a little scary) to consider the rise of drug resistant TB. Too many years of treatment with drugs that didn't completely kill TB, created an opportunity for the few resistant microbes to strengthen free of competition from the other common TB strains.

JR

I think the same argument could be made for the continued existence of rap music..........

 

[John Roberts]

Re: Some truth about investment and growth

Survival of the fittest does not always give us butterflies.

JR

 

[Jack Arnott]

Re: Some truth about investment and growth

While cancer does not have an ideology per se,

John, it's called a metaphor. Writers, EG Edward Abbey, use them. Smart people are supposed to be able to spot them.
I thought it was appropriate for the conversation.

Or, to spell it out. I was agreeing with Kristain. That just getting bigger is not always the right move.