in theory, the internet helps change some of that by providing new avenues to connect, virality, social networks, curation. i almost think money helps most by providing the necessary time to develop an idea fully.
if you get that book advance, or that vc money, then maybe you can focus on the product and not on your next meal.
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Iâm as Canadian as they come. Iâve seen the Bay around since I was a very young boy, and that was over 50 years ago. They were strictly fur traders to start with; they are strictly retailers now: the transition from one to the other took over a century. That is hardly a shiny new company that bought the company name.
None of this was an endorsement of HBC - Iâve rarely shopped there over the years, I have no skin in that game. These have been strictly statements of fact. I rather doubt that puts me in Mr. Azizâs company. Get your facts straight next time, and you wonât have to impute something to me that ainât so.
This is getting way off-topic. I wonât be pursuing this further.
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Sounds like someone has his beaver hat in a twist. The original quote, which you took issue with was:
âMicrosoft is just the latest in a forever-chain of tech companies who will see their time, be glad in it, then fade away into the dustbin of history, like the Hudsonâs Bay Company.â
Tell me the HBC is on the forefront of consumerism these days, even as a retailer. Theyâre not. They are irrelevant. That was the comparison. Not only that, but they have been bought a bunch of times and are hardly anything like the company they were at their peak.
The facts are straight. The facts were already straight from the beginning. What has happened is you have taken issue with my saying HBC is fading away, because to you they are still âin business.â But I didnât say they had gone out of business. I said theyâve been fading into the dustbin. Which they have been. They are now irrelevant to the world, when once they had dominated it.
Like Microsoft. Like IBM. And like Apple will be.
THAT was the comparison.
Literalists under every rock, these days.
No, you said they had fade(d) into the dustbin of history, which is patently untrue, as they remain a major force in Canadian retailing. And heck, BB seems to think they and their point blankets are still wonderful things. Also, please remind me of when they dominated the world, because I donât remember âthe worldâ needing a lot of beaver hats.
A company like Victor or Polaroid would probably be a better example.
Oh heck, they even run pretty consistently at a profit, and I donât recall them contracting their core business when the other department stores were. Evidently supplying services that people use isnât enough: a company has to be a world beater to be ârelevantâ.
The kicker here is that, during the period he sees HBC as being world beaters, they were operating under a government-granted monopoly, i.e., as an example of crony capitalism and imperialism-by-proxy at its finest, of the same sort that produced the East India Company. When the political environment changed to make such an arrangement impossible, they were already changing. The EIC, by comparison, had to fold.
Actually, I think HBC has lessons for the âworld beatersâ. How many companies have had such longevity under changing circumstances? How many remain profitable in so-called âsunset industriesâ? Is it perhaps possible that storefront retail is not quite so irrelevant?
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Those are non-optimal comparisons. Hereâs why. HBC was once the dominant corporation, owning something like 15% of North America outright and closer to 25% in direct influence over North American lands. They had monopolized the fur trade with government acquiescence to do their thing. Sound similar to Microsoft yet?
And now theyâve faded significantly from being the defacto government authority in those tribal lands, to now being a storefront for stuff that Canadians seem to hold dear but other places not so much. Sound similar to Microsoftâs story yet?
And will continue to fadeâŚ
HBC is a good comparison to Microsoft. Polaroid or Victor, not so much. East India Company is somewhat a good comparison, but theyâre out of business and Microsoft isnât⌠yet.
Yeah, sounds identical to Microsoft, which was the obviously the de facto government authority over at least 25% of North American Lands (and in Microsoftâs time, a non-negligible number of people actually lived there, too). And Microsoftâs period of de facto authority over these lands/people lasted just as long as the HBCâs too, so theyâre totally similar on that point, too.
But Microsoft certainly isnât like any other 20th-century tech-based company that translated its IP and early-entrance status into a near-complete monopoly in its product sector for a stretch of years. Nope. Totally different.
And by the way, when did those outside of Canada ever hold the HBC dear?
Now your arguments arenât making sense
A comparison is a comparison not a clone. Replace the word âlandsâ with âcomputer software infrastructureâ and youâll be there (& pump up the %). Welcome! You just stepped over the line from ABC-darian literalism, to being able to interpret and discuss business concepts.
Europe did, and most of the world did, for a long time. HBC was the monopoly that controlled most of the fur in the world at the time. Europe had to outsource this production to North America, similar to how Microsoft and other American tech companies dominate most aspects of the worldâs software and hardware infrastructure, with major aspects of production outsourced to Asia.
And yet⌠after all these years⌠Microsoftâs glow has faded and continues to fade. Like HBC, and someday Apple & The Goog.
I donât know why youâre insistent that a Microsoft/HBC comparison isnât a good one, other than pure stubbornness at this point. Itâs an apt comparison.
Right. Because landâand not furâwas HBCâs product, just like computer software infrastructure is Microsoftâs. Great analogy. And Microsoft has de facto government authority over computer software infrastructure, too.
Having a monopoly doesnât mean that people hold you dear. I donât know if any really holds De Beerâs, Microsoft, or Standard Oil dear. Does anyone really even think about De Beerâs when they buy diamonds, or OPEC when they buy oil/gas? Is China and its rare earths synonymous with cell phones? Do consumers think a lot about where the raw materials in their products come from?
And anyway, HBC was also not a global monopoly, as Russia and even non-HBC-controlled North America also supplied a lot of furs.
And why are you rejecting Polaroid and Victor, again?
When Microsoft celebrates its 300th birthday you can get back to us with how well it compares to HBC.
Still persisting mightily in many ways, Microsoft wields incredible power over government systems. Educate yourself:
http://techrights.org/wiki/index.php/Microsoft_influence_in_the_United_States_government
This is similar to HBC being the law in the Hudson Bay watershed. As far as software infrastructure in the US government, Microsoft has for many years been the de facto authority.
You clearly havenât been watching TV (or paying attention, for that matter.) Remember the Apple/Microsoft holy wars?
If I were you, I would have sold all of my Microsoft shares about 10 years ago, rather than hanging on so doggedly.
Yeah, thatâs super similar to exerting de facto government control and being the law. Totally. Just like China has de facto control over my smartphone, and the middle east has de facto control over most cars on the road. And just like Bell used to have de facto control over most people, companies, and governments in the US.
Uhhh, youâre saying Apple was able to lampoon Microsoftâs reputation for stodgy uncoolness because of how dearly MS was regarded?
But why? Doesnât MS have de facto authority over the government? Are you selling all of your T-bills, too?
Your arguments are absurd. But you may redeem yourself by explaining why you think Polaroid, Victor, DeBeerâs and Standard Oil are better comparisons.
I see. Would you be impressed if I dismissed your absurd arguments like that?
I never said De Beerâs or Standard Oil was a good comparison for Microsoft, only that they were similar to HBC in that they were the source of a raw material and that consumers ultimately care little about them.
Polaroid and Victor were both technology companies that burned very brightly for brief periods as a result of IP monopolies and early-entrance status, and both suffered massive reversals as other companies caught up and surpassed them, and as consumer preferences changed.
Iâd agree - and strictly speaking, Iâd say that there is some cross-over from the current market segment they dominate. If MS is willing to throw everything theyâve got into the fight, I figure theyâve got a 1 in 5 chance of survival.
At and that odds, Iâd take 10-20 years of fat dividend checks.
I wouldnât be impressed, but I would continue to insist that you offer something of value which takes the form of two-way participation in the conversation rather than the combativeness and stridence that youâve been exhibiting so far.
Are you sure people didnât care about these companies? The Rockefellers were revered as gods in the 1930âs, and still are held in high regard; and the diamonds campaigns are off the chain. Just as Windows freaks go all out to defend their brand. And are you sure people didnât kowtow to HBC? I bet you they did, but Iâd like to see proof one way or the other.
Hmmm, I seem to recall a similar thing happening to HBC as the fur trade changed, people migrated and competition increased, destroying their monopolyâŚ
All youâre trying to do at this point is petulantly refuse to see any similarities between HBC and Microsoft. I see many.
Thatâs because you apparently donât know HBC history, and evidently you donât have a good feel for its current status.
- My Bach-numbered friend to the contrary, their monopoly was rather more than de facto, it was de jure as well, much like the EIC. The monopoly was chartered, with governing rights included. Until the political climate changed, the First Nations didnât have the right to trade elsewhere. The writing was on the wall for that when one of our courts ruled in favour of a MĂŠtis challenge to this lock-in in the mid-19th century. (This ruling was in direct contravention to the letter of the law, I might add, and we did not have a constitution back then; we were still a colony. Suffice to say that the social climate was changing enough to make such a ruling possible.) The point here is that Microsoft didnât enjoy that kind of monopoly - they werenât really a state proxy like HBC, just very sharp dealers. When your Justice Department started cracking down on those business practices, they had to deal with an environment they didnât completely control, and they had to try to adapt. They havenât been entirely successful at it.
HBCâs kind of monopoly, however, hasnât really been possible since the start of the 20th century (although we may see its return if the worldâs oligarchs continue to consolidate their control of the worldâs governments).
Note that HBC did have competition back when they controlled the fur trade, the Northwest Company operating out of Montreal, but what happened to that competition is indicative of just how different the kind of monopoly they enjoyed was from what the tech giants have enjoyed. When the competition heated up between the two companies, the British Government stepped in to force a merger.
- HBCâs adaptation to the loss of monopoly was successful. They started into retail about 150 years ago, and into department stores about a century ago when the profitability started going out of the fur trade. Please note, they only folded the last of the trading posts and remote community stores in 1987 - there is a great deal of continuity between then and now. To call them âirrelevantâ in their current business is silly: they are consistently profitable, and they have survived when damned near all of their of their original competitors have fallen by the wayside. Theyâre even giving some indication of outlasting the new competition. When they wound down Zellers and bought Saks Fifth Avenue, they took a small loss on the year: they sold their Zellers leaseholds to Target. Ironically, Target has been taking a bath in Canada.
Microsoft is going to have to be both very lucky and very shrewd to achieve the same longevity, I think. To be blunt, youâve been using HBC as an example of failure to adapt when the truth of the matter is that theyâre actually an exemplar of how to adapt successfully to the loss of monopoly.
I see. So, in your opinion, youâve offered an articulate and concise criticism of my use of Victor and Polaroid as a basis of comparison, and didnât just dismiss them out of hand as absurd?
Rockefellers were revered as gods? Perhaps by some, but they were also reviled as demons, and Standard Oil was ultimately broken up in 1911 (well before the '30s) as an illegal monopoly. If people thought well of him in his later years, perhaps it would be because of his turn to philanthropy and away from business. Kind of like how itâs possible to view MS very negatively, but think Bill gates is now doing wonderful things with his money.
Iâm not sure that diamond campaigns or Windows freaks have much to do with how the average consumer thinks of things. De Beerâs may hype diamonds, but I donât think consumers are asking for De Beerâs diamonds by name or feel any connection to the brand, and I donât think the average consumer thinks great thoughts about MS products.
Again, HBC never had a monopoly on the world fur trade. The had a near monopoly in the lands they controlled in Canada and the US, sure, but Russia has always been an important source of furs and coastal North America was also a contemporaneous source not under HBC control.
The changes HBC has undergone have played out over a very long time scale, and the company has successfully navigated most of the changes. I mean, you can point to 99.99% of companies that ever existed as companies that have ultimately failed to adapt and have succumbed to changing times. Using a company that has survived for over 300 years old and is still a household name in its market as the basis for comparison just seems very silly, especially when millions of companies have been born and died since HBC was founded. And thatâs without getting into your weird arguments about how HBC is a good comparator because it once held 25% of North American land and was the de facto government in lots of Canada.
I have been using it as a non-tech example of a pattern that Microsoft will probably follow. I could have compared Microsoft to IBM, but so what. I think the real analog is in history, with HBC.
Can you think of an earlier company than HBC who was once prominent and simply faded over time? I canât. Thatâs why I chose HBC. The EIC was similar in expansiveness, but a single government action summarily killed it, so itâs not a good compare. If the Internet Explorer lawsuits had taken an even harsher turn, perhaps, but that didnât happen.
Now, go right ahead there and split already-split hairs⌠de facto, de jure LOL My argument is a lot simpler and doesnât require a lengthy explanation, like yours and Bachâs.
Microsoft is like HBC because both of them:
â˘enjoyed rapid expansion into untouched markets
â˘extensive government protection
â˘absolute authority within their domain
â˘near-total financial monopoly on a market
â˘âŚfor a time. And then, problems.
â˘Big lawsuits.
â˘Government tinkering
â˘Then, no more monopoly.
â˘And now, âbigâ perhaps, but fading into irrelevance⌠not gone⌠just withering away.
There are more similarities than differences. Much like Canadians and Americans themselvesâŚ
Well, more than a little bit of that is very debatable.
First off, HBC has not faded over time: their presence in their home market is still pervasive. When the business of their competitors contracted (e.g., Morganâs, Simpsonâs, Eatonâs, Sears), theirs did not.
Second, the US government had anti-trust and competition laws already in place to deal with MS, whether it was enforcing them or not. HBC had laws specifically to enable its monopoly. Thatâs the difference between de facto and de jure. There is extensive government protection and then there is extensive government protection. MS depended on a blind eye to dubious business practices for a couple of decades; HBC had active government backing for 150 years.
MS had absolute authority within their domain? Not at all, or they would still be running the roost. Considerable, yes; absolute, no. Even back a decade or two ago, they were losing their pre-eminence in certain of their markets to others, the server market most notably. (The Internet was the foot in the door - IIS was an also-ran right from the get-go.) MS exerted control over its distributors to maintain its monopoly; HBC did not - as our friend the French Suite points out, there was competition from other sources, notably Russia. HBC had control over its suppliers (not really a consideration for a software firm). HBCâs style of control was much more like Walmartâs, only more absolute.
Near-total financial monopoly on a market? Thatâs what HBC did not have - see above regarding competition. What they had was near-total financial control where they were the market: again, in modern terms, the Walmart model. They had guaranteed costs, not necessarily guaranteed profits.
Big lawsuit? Nah, not really in HBCâs case. The writing was already on the wall when that happened. They lost their monopoly because the various governments wanted to settle the land they controlled. Their monopoly was entirely dependent on government sanction. Thatâs a bit of a difference from government indifference. HBC was given a lemon and made lemonade. Their move into retail was a result of that westward expansion - they became provisioners for the prospectors and settlers.
Now, you can talk about âsplitting hairsâ, but the only real fact Iâve seen from you was regarding the changes of ownership, and that one is irrelevant. I went through two changes of ownership with Babcock and Wilcox in the late 70s - B & W is still the same company. The Bay is still pretty much the same firm that took over the Morganâs on Ste-Catherine St. when I was a young man. I would be surprised if a company lasted that long without a few changes of ownership.
Everything else has been straight assertion of opinion. Show me the numbers. Show me how HBC has failed to adapt over the years, how itâs âwithering awayâ. The history is available in great detail - Hell, they teach it in school. (At least they did when I was a kid.) The financials arenât that difficult to find - I did.
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Pervasive at home does not equate to retaining former brilliance.
HBCâs influence was on the world fur market, via Britain. Now, they are practically unheard of outside of Canada. And if youâre going to argue that theyâve expanded (Saks, Lord & Taylor), thatâs backwards: their holders have agglomerated these other businesses. Those didnât come from HBC but were added to it.
They may seem huge to you up in Canada, but they are miniscule compared to, say, a Macyâs. HBC operates about 90 locations, while Macyâs operates just under 800. HBC runs at about 7 billion to Macyâs 28 billion.
Itâs a stretch to say that HBC has retained its lustre. They may seem big but thatâs relative. In the USA, nowadays, a HBC is tiny. And thatâs beside the point anyways. The point being that a world player faded into being a smaller phenomenon, which you admitted.
No, it did not. It depended on getting into every nook and cranny of the government and sucking up as much $$$ and mindshare as possible. It was active on the part of the government, not passive. Similar, in effect, to HBC. Of course it occurred in different eras, and the mechanisms through which each secured its dominion were different: government charter or fiat vs. contract awards and court rulings. But the effect was the same for HBC and Microsoft: with the governmentsâ direct intervention, their monopolies were blessed and expanded.
Getting back to Microsoft. We all know how their world influence on the OS market grew quickly, and my hunch is that they are about to turn a corner, just like HBC did when they transformed to a mercantile. I know we are the middle of a debate about such phrases as just like HBC and it may grate your ears. But I chose the phrase specifically because of what Iâm about to say.
Microsoft just laid off 18,000 workers, but guess what they are also doing? They are transforming themselves into a mercantile! Yes. They just opened a store near me. They sell stuff that is mostly not theirs. They announced in 2011 they are opening 75 more stores over the next few years, and they are already at about 100 I think.
These stores are beautiful by the way. Very swanky. Both sidewalls are covered in a solid swath of LED displays. Maybe 100 27 inch displays wallpapering the walls. Then you go in there and they have a few Microsoft things like their tablets (which are totally annoying to use) and then a ton of other stuff like Makerbots and GoPros and whatnot. How hilarious that Microsoft was once the Death Star and now theyâre trying to become the Company Store.
Guillaume Sayer ring any bells?
Now I know you are stretching and stretching to prove there isnât a comparison between MSoft and HBCâŚ
The resemblance is striking, actually, if you stop the shenanigans of just stubbornly trying to disprove everything I say. Of course there are lots of differences: different industries, different eras, different laws and customs, different events, different ethos with many of the key players, different time frame, etc. But not so different that a comparison is out of the question. Itâs uncanny how much Microsoft and HBC have had these time-travel like parallel stories. Oh wait, I forgot: Iâm the parallelist, you are the orthogonist. AnywaysâŚ
