

Software defies economics. It can be replicated almost infinitely at almost no cost. When software companies sold software one package at a time in the 90s anti-piracy was a big deal because it was very simple for any given person to “copy a floppy” and receive the full package of software from another individual without the company knowing or being involved. It was like borrowing a rake from a neighbor, but the neighbor got to keep his rake as well.
Because of this, software companies decided instead to treat software as a service rather than as a product. In the 2010s many software companies shifted to the subscription model where instead of selling software one package at a time, the service of the software would be available to rent while the company guarded the propriety aspects of their software. This was like the company owning the rake and both you and your neighbor needed to pay the company to borrow the rake.
Now software can be reverse-engineered without the source-code. Now if you rent the rake from the company, you can keep a copy of it and freely distribute it without the company being involved or aware. I’m not sure how software companies will reckon with this advancement.



Small local companies are smaller versions of the same thing, and yes, they are protected by their LLCs. I’m in the small business world and I am constantly shocked by the level of incompetence and short-sightedness of the average business owner. There is no way the average person gets a business loan only on their proven track record of effectiveness in executive roles maintaining consistent profitability. I once went to a seminar for small business people and the speaker literally revealed that the secret to a successful business was to make a profit, and profit equals revenue minus expenses. There were business owners in the room who literally did not know that or had any idea at all of their financials.
What businesspeople at all levels know is that you never ever risk your own money. You risk other peoples’ money. Risk the money of people and institutions who wouldn’t miss it or who would miss it that you can gain the confidence of. When you hear about “chronic entrepreneurs” who owned a series of failed businesses until they finally ran one that was successful, it’s not because they proved they were competent to get a loan in the first place. They proved they were incompetent several times, in fact. Having limited liability applies in this context. Having good connections applies most of all in these contexts. Most people becoming business owners aren’t seasoned experts who have proven to our wisened financial leaders that they are responsible enough to manage a business.
I have no doubt that there are some honest workers who believe capitalists when they say their money is at risk and willingly risk their own money on a business venture. This is absolutely not the norm.