I invest, therefore I am entitled to make money

Okay, I had this thought originally with a different story, but I’d prefer to report on that exact situation in the future. But, Microsoft decided to make the same stance, so let’s have a look. We’re gonna start with a quote from CEO of Microsoft, Satya Nadella:

We’ve invested a lot. No one can accuse Microsoft of not having invested for the last 25 years. And now we have to turn this into a sustainable business that delivers what is fundamentally one of the best sources of entertainment. The challenge we have is that we’ve not been monetizing that entertainment. If anything, we’ve been subsidizing that entertainment. In fact, there’s more monetization of Xbox games happening on YouTube than at Microsoft.

Okay, where do I start? Let’s unpack a “common misconception”. Maybe I should give this phenomenon a name, because it is common, but it’s not misconception strictly speaking. Today, we’re gonna call this “Corporate Manifest Destiny”. On one hand, everybody seems to agree that we live in a free market environment (we don’t, but who am I to say), yet, corporations are arrogantly assuming that their growth and ultimate profitability are an inevitability, and any barrier to that profit is an unnatural obstacle to be cleared. In other words, if a retail investor buys into a stock that won’t grow, he’s retarded and free market saved the day. If Microsoft buys a gaming studio, if it fails to make money, the studio is retarded, the public who didn’t buy the game is retarded, hell, the government who didn’t subsidize the production is retarded, but never Microsoft. Microsoft is running strong manifestation game and won’t be unsuccessful. Even the free market can’t stop Microsoft from succeeding. It is Corporate Manifest Destiny. But let’s move on.

To be clear, above, I was trying to point out the public opinion. We’re gonna talk about the very same thing now, but we’re gonna focus on the actual happening. That is the idea, that if I invest, I am bound to succeed. And at this point, I have a yucky feeling in my stomach, because that depends on the reader. As foreshadowed above, some people will believe this and some people will correctly believe that investment alone doesn’t lead to success (and often it’s just a setting flipped inside each and every one of us, so in different situations the same people will have different beliefs, but let’s keep it simple here). We have to focus on the former mindset, as the latter is just rational way of handling the situation.

First and foremost, this feels like the oldest trick in the book. If you think about it for just a second, you realize, that a lot of scams work this way and therefore, clearly something profound is going on here. Case in point, suppose you buy into a get rich quick scheme (I’m not gonna bother to actually name any here as I am not prepared to be sued). When you inevitably lose all your money, you’re told you didn’t invest enough. So you get a loan. You lose your money again. You’re told you didn’t try hard enough. So you schedule more calls. And it doesn’t end. The problem here is, that often, the people don’t actually do the work (which is used against them when they fail), but even if they do, they find, that they simply can’t succeed. I said I’m not gonna name any names, but I wanna give an example. Imagine selling make up (I’m sure you can name several companies that promise you big life change with that). People buy make up, right? What if you could get a commission? Sounds like you could make some serious money, right? Well, if you’re not into this to begin with, you’re gonna find that this is simply retarded idea, as you personally peddling your product is expensive and time consuming, meanwhile the customers can get state of the art make up in their local drug store or even supermarket, during their weekly shopping. No matter how good you are, you simply can’t compete with this convenience. (Note: These companies would let you believe that their product is superior, but come on, if you believe that some random company can get better product than L’Oréal, then I don’t know what to say to you.)

So, the point here is, we are made to believe, that if we really tried, we would succeed. The problem with that is, it’s also what we naturally believe (if we don’t, that’s called clinical depression). So we are in this world, where we want to succeed, believe that if we work hard, we would succeed and everyone tells us we have to work hard for our success. Does this sound like Corporate Manifest Destiny? Well, yeah, actually, but there’s a difference. If we fail, that’s the end of the story - broadly speaking. I’m trying to say, that we have only so much going on in our life, that failure to “get rich” is really the end, because there’s nobody else but us. That’s the difference to Corporate Manifest Destiny. Microsoft is not a gaming company. Their original product is an operating system. So if we wanted to compare this to our personal example, we’d have to imagine one person, who does some 9-5 and then this person finds a second person, who for some reason (be it financial/employment contract, family tie, volunteering effort) wants to enrich the 9-5er, so they start selling make up, and it’s a *pick: disaster-success-stable profit*.

Now, I hope my point is coming to the forefront. The problem here is, that really, we have two (multiple, but two for simplicity) entities here, not one. Remember when Embracer got into trouble and as a result Piranha Bytes got shut down, despite being nearly finished with a new game that even got government support? I still don’t get it, BTW. The shutdown came from an event that was completely out of control of the studio. Wait, you see, there’s a semantic problem again. Like, natural disaster is also out of your control, but something else is going on here. Think about it, they got bought, you know, somebody invested in them and then the investor just destroyed them. ? I know, people are gonna tell me that I have to consider the economic factors, but let’s not start there. Let’s start in a place where things make innate sense. And innately, what would Piranha Bytes do, if they haven’t been bought? Some might say, that to make a game, you have to have cash first, to finance the development, but they were already successful. The way I see it, this only applies to your first product, afterwards, you should be able to fund yourself. If that’s not the case, I think it’s a flawed system. Others (like me) would say, that they would at least finish the game, before going out of business. I mean, the history is full of rushed games (Gothic 3, anyone?) that were released in an unplayable state. Like, come on. It’s on my about page, is it not? If it’s worth doing, it’s worth doing wrong. But because they were owned (???), they couldn’t even release what they had. They had to obey their parent company. And it doesn’t make any sense, because it was the parent who invested in them, doesn’t the parent want to have at least something rather than nothing?

Okay, back to Microsoft. They say they have invested and they have invested a lot and that they are tired of investing without the investment raising in value. But remember, really, we have two entities here, not one! So, if the investor gets into trouble, the investees are just out of luck. Okay. I don’t agree, but I see the reason. If the investee doesn’t perform as expected, the investor is going to … What are they going to do? Man, it’s hard to express original thoughts. I hope nobody attempted to explain this, because I could have just read them and give you the good version. I’m trying to say, that if you invest in something that is completely different from what you’re doing, by definition you don’t know how it works and therefore if you wanted to help your investment, you really can’t, because you have no clue what’s going on. Like, this makes sense in hostile takeovers, when are you trying to eliminate competition (like when Facebook bought Instagram and WhatsApp), but in that case the entire point is to hinder the operation and get the returns from your original business. When you invest in something completely unrelated, well, why did you do it to begin with?

So, the question that arises, when should you invest in stuff that you are not personally involved in? Here we should also note, that there’s a difference between natural persons and corporate entities, but we’ll gloss over it today. And the answer to that question then determines, if Corporate Manifest Destiny is a reasonable expectation or a pipe dream. Personally, I think it’s appalling and describing it as a pipe dream is a euphemism. And I can’t explain this any further, but I thought about something else, that feels related.

Imagine you wanna start a business and you do. Imagine you give it your all, make all the right moves, work hard, you do all of that. You scale, you hire some employees, you continue working hard, you scale, etc. At some point, you will have reached such a scale, that you could hire a person that would do your work and do that, freeing you to do other things. Now, while this is a widely accepted way of success, I feel it’s unethical, but I can’t begin to explain why. It’s simply just a feeling. If you have thoughts about this, please e-mail me, I’d love to hear your opinion. And I’ll leave with that today.