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Why do so many tech companies, like Reddit and Twitter are making their platforms worse for their users all of a sudden? (self.asklemmy)

submitted 2 years ago by cilantrillo to c/[email protected]

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[–] [email protected] 7 points 2 years ago (1 children)

Interest rates had been historically low for a long time. Loans were cheap and venture capital was flowing freely. Tech companies could focus more on growing their market share with lots and lots of runway before they needed to become profitable.

Then during the pandemic, Congress gave a massive bailout to businesses. Inflation went skyrocketing, and the Fed had to raise interest rates to limit the damage.

Now money isn't flowing nearly as freely for tech companies. Loans are more expensive, and investors are more content to leave their money in high-yield bonds instead. Tech companies are pivoting to stop chasing market share and instead start taking their profits from their current market share, even if it means their market share stops growing.

[–] PhantomPhanatic 1 points 2 years ago

This is a take I haven't seen yet, but I think it's spot on. A lot of businesses grew unsustainably because of cheap loans being available for so long. We're going to see a lot of companies and services get worse or crash and burn.