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Comment by titzer | Hacker News Reader

I joined in 2010 and left in 2019. The company I joined was very different than the one I left. Every single one of Google's problems can be traced back to scale. Loss of trust, distance to top leadership, tone-deafness, repeated failures, escalating surveillance dystopia, perf management overhead, leaks...all of them are fundamentally due to scale. And scale is simply because greed. Gotta make that 23% YoY revenue growth. That is Google's true mission. Eat the world. It's now $180 billion in revenue. In five years, that will need to be $400 billion. And five years after that, it will need to be pulling close to a trillion.

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> And scale is simply because greed.

Is it possible that it is simply because of survival? The general theme of business I see is if you do not keep up with others, you will lose to your competitors. Especially in a winner take all business with network effects and low marginal costs like tech.

collective systemic greed

Keeping up with the competition, if you’re talking about quality of product/service, isn’t the same thing as growing yearly revenues, which usually entails scaling up operations and product lines to more places and more customers, which no business has to do just for the sake of survival. See for example long-surviving small- to medium-scale family businesses. There doesn’t seem to be another motivation for chasing YoY revenue growth other than greed.

or simple corporate charter. if the company is organized around maximizing shareholder value, that's what they'll do.

that's why we have public benefit corporations.

// See for example long-surviving small- to medium-scale family businesses

Are these business in industries with fierce large competitors? If not, it's an unreasonable comparison - they are only not getting eaten because nobody's trying to eat them.

I love small and medium businesses but just making a game theoretical point - you can only chose to limit your competitive effort to the extent that nobody is increasing theirs.

There are family owned businesses where others try to beat them, but those businesses are so tied to their space that it is hard for others to step in and as these companies don't try to expand too much, they are free to cooperate with anybody, which gives them a beneficial network.

However that is heavily industry specific and in tech, where scales are very different only works for very small niches.

There are plenty of small family scale business in fields like alcoholic drinks and food, and they have large, fierce competitors.

These businesses have a natural limit to their growth due to the estate tax. If the company grows too large, the taxes on death can be crippling for families that can not plan decades in advance. Public corporations do not have to pay this tax, and therefore have an unnatural advantage in holding valuable assets over long periods of time. The estate tax is well-intentioned, but because it hits only family firms it’s essentially regressive despite being applied only to wealthy families.

The owners of public companies dont have to pay the estate tax when they die, as their children inherit the stock?

I thought it was for the total value exchanged?

The owners of public companies are irrelevant to the large public company’s continued existence. Owners for them come and go and pay their own taxes, but the company never has to pay the estate taxes itself, hence the advantage against those who must.

Also due to wanting to keep your employees. You can't make the same amount of money year over year and retain employees who never get raises above CPI or promotions into management/ownership. That's just not going to work.

I don't know about that. There are plenty of examples of "boutique" companies who pay well and have insanely good retention over the long term— 37signals/basecamp as one example, at least until that dustup earlier this year. Valve is probably another.

It's not hard to imagine a Google that had taken this path, just focused indefinitely on search & search ads, run itself with <1000 highly skilled, highly paid employees, and never done email, maps, docs, payments, mobile phones, video, or and any of the rest of it.

I think they could have even done most of those things and remained small and lean. Most of the bloat isn't that they've entered these spaces, but that there are a million little sub-projects within each one chasing marginal (at best) improvements.

Didn’t Craigslist did basically that? I’m not familiar with recent developments but for decades they stayed small and focused and seemed to have done well.

Yes. They've stayed small and focused but while AFAIK they're still doing OK, the latest numbers I've seen on them listed about 50 employees. And I'm willing to bet most of them aren't unusually well compensated. I'm also not sure when I last heard Craigslist come up in conversation although I expect especially people in urban areas still use them for classified advertising.

Yeah, that was my point - they chose to stay small (this is both in focus of the company as well as number of employees).

I’d personally probably be happier in a small company than in one that is eternally chasing infinite growth (both in goals and in number of employees).

I worked for a very small company for a number of years and it was a pretty good run for the most part. That said, I'm in a significantly better place financially having worked for a reasonably big public company for about the past decade.

And after whoever started the project gets their promotion, the product will be killed off and Google will chase another shiny thing. How much does anyone trust totally new Google things these days?

It's not just engineers this applies to. Sure, if everyone makes $400k + benefits and profit share with good work-life balance and such, I guess that might fly. But most companies have customer support, IT, and other cost centers where you have entry-level employees who need to progress, and that necessarily means increasing wages over time to retain and advance good employees.

Besides, junior developers / interns are supposed to do what exactly if there is no increasing revenue at a company and no one leaves above them? Just hang out until someone quits even though they're not going to?

Retraining a junior developer is costly. Advancing them is as well, but less costly than constantly cycling in new junior developers and interns to do the HTML/CSS + ETL script jobs no one likes doing.

Growth is natural and important towards keeping your staff happy and moving up.

Both Basecamp and Valve were growing massively, so I don't think those are good examples.

Besides, you run the real existential risk of getting your margin cannibalized by another startup or Amazon if you don't grow enough. In a world where you pay everyone a lot of money, the product is awesome, and there's no growth, there's a lot of margin in your product that someone is going to target - some subset of customers you aren't serving, or customers who aren't that loyal and willing to switch for 20-50% lower costs.

I'm not saying VC funding is a good thing; I largely think what we are seeing due to massive QE is malinvestment on a grand scale and is why you see dumb shit like Juicero.

But natural, bootstrapped growth is a good thing - and necessary, if you want to survive. Trending sideways is waiting for death on many fronts - your labor force being the largest one.

If your workforce is improving, you might have a kind of natural growth where they either deliver better products or more efficient services and you can acquire more customers (or charge more) without expanding your operations.

Besides, if you are paying a good wage, have a good work/life balance, a good environment and so on, people will be content and just work there. It's like farming or factory work - you're doing what you expect to be doing for the rest of your life, or at least the next 10-20 years.

> Besides, if you are paying a good wage, have a good work/life balance, a good environment and so on, people will be content and just work there.

How does this work when your competitor is offering half of compensation via RSUs skyrocketing in value?

>It's like farming or factory work - you're doing what you expect to be doing for the rest of your life, or at least the next 10-20 years.

This describes no one I know that earns a lot of income. I imagine a person that expects little change over 10 to 20 years will probably not be in position to grab opportunities when they present themselves.

Valve doesn’t have as many employees but they definitely grow in both revenue and product line (vr, deck, they had other hardware products before - steam itself was a “side project” to distribute half life 2!)

Everyone knows that valve mostly care about steam nowadays, and at most one other core gaming product.

They largely abandoned dota 2, and CS is mostly plowing without any sign of major changes.

If steam were not this successful, it would have to hire more to grow revenue. It was just that steam as a platform is so efficient in utilizing manpower, it makes it less hungry on hiring.

Most organization aspiring growth has to find a way. It could be the market is growing, or better tech, or more employee, or more often, a mix of 2 or more of these or other unmentioned factors.

That’s my dream too, but unfortunately the Google that took that path would have died long ago after being choked off by other large ecosystems from Microsoft, Apple, etc.

First Chrome, then Android were critical, life-or-death maneuvers for Google. Without paving their own path straight to users’ eyeballs, Google would have never survived. But succeeding in that path also required an entire ecosystem to back it up.

Google also does a lot of frivolous stuff to explore, but all of the major expansions are required just to protect their Search and Ad products.

But Google could also have licensed search technology to other companies interested in making the top-to-bottom ecosystem play. I mean, they even tried that, they were just trying to do it in a market that wasn't ready to take search seriously.

Anyway, I'm not saying it's what they should have done. What they have done has obviously been wildly successful. But they could have done this and still given hundreds of people full-career employment and generational wealth.

Survival for executives at publicly traded companies has led to a maniacal focus on quarterly results, discouraging R&D without near-term payout and disincentivizing minimization of negative externalities that will eventually impact everyone, including the company and its employees. The Long Term Stock Exchange was recently launched as an alternative and Asana and Twilio recently listed there (dual-listed along with existing NYSE listings) [1]. It's far too early to say if it will have any wider impact but I think the larger point is that what's necessary for "survival" is dependent on the context, and it may be possible to change the underlying conditions.

[1] https://medium.com/hps-insight/on-short-termism-8e28fbe4ccc6

I thought the tech companies we are talking about do do some very hefty R&D, at least compared to other companies. For example, Amazon plowing all revenue back into expanding for 2 decades, Apple obviously invests quite a bit and just came out with a leap in processors, Google with its many services including Maps and self driving cars, Facebook and VR, etc.

No, Google would easily survive if they focused on maintaing existing services and making the headcount stable instead of increasing.

Most businesses in the world survive with their piece of the pie and remaining having the same profits or slightly lower/higher than previous years. You don't disappear over night, and no market is really a "winner takes it all", it's just what management wants you to believe so you fight the good fight for your company.

Sure, but the stock price would tank (note that the current multiple assumes growth), employees would leave due to poor compensation, and starts a downward spiral.

I am not sure if that is called survival.

And no, most businesses in the world do not survive that long. Lifetime of businesses are often much shorter than lifetime of humans. Even many of them that look like have survived may share the name only and are effectively new businesses.

> employees would leave due to poor compensation

With a gross profit of 100 billion dollars a year [1] they can easily outbid the market compensation if they want to and stay with current revenue. But again how many Jeff Deans can one company need before it calls itself The Man?

[1] https://www.macrotrends.net/stocks/charts/GOOG/alphabet/gros...

Why would gross profit be the relevant metric here and not net profit?

You’re right. 63 billion dollars of net profit per year is a better metric.

If the stock price went down, they would just pay employees in cash, which is a slightly less tax-advantaged solution.

How are RSUs tax advantaged?

The award is taxed at the same rate, but theoretically (in the States, at least) you can hold them for a year after they vest and only pay the much lower long term tax on the appreciation of their value. In order to easily compare apples to apples this assumes that in the alternative to getting RSU's that you would actually get compensated more income instead in proportion to the value increase of the company. An equivalent would probably be to compare a cash bonus that is directly tied to the value of the stock vs the equivalent gain in RSU. All else being equal, the RSU gain is more tax advantageous if you have held the RSU for a year or longer before liquidating the position.

That is not a tax advantage. It is simply paying long term capital gains tax rate on long term capital gains.

Companies are not paying with RSUs because of a tax advantage, they are paying because it is cheaper than paying with cash.

While it's unclear whether grandparent was referring to tax advantages for the company vs. the individual, I'm not sure I understand your comment about lack of tax advantage in the context of individual awards.

Scenario A: Company X gives me a sign-on bonus of $10,000 and an agreement to bonus me $100 * y%, where y is the increase in value of the company.

Scenario B: Company X awards me $10,000 of RSU that vests after 1 year.

Let's say I'm in the highest bracket, $523,601 or more in income. The tax rate for that bracket for 2021 is 37%.

After 1 year, the stock price goes up 100%.

In Scenario A, I have vested RSU's worth $20,000. If I sell $10,000 of that (the gains only), I pay short term capital gains equivalent to my tax bracket, or $3700. If I hold that stock for 1 year after vesting and the stock price stays exact same for the next year, I pay the long term rate of the highest bracket which is currently 20%, or $2,000.

In Scenario B, I get a bonus of $10,000 just the same, but there is no situation where I'm not stuck with paying $3,700 on that $10,000 gain. In Scenario A, I can save almost 50% of the tax bill by holding it for a year.

This isn't how things work - you pay income taxes on RSUs when they vest, not when you sell, and their cost basis is the price at the time of vesting. So it's entirely irrelevant from a tax perspective whether they come in cash or stock. If you want cash, you can sell the stock and if you want stock, you can buy - the tax consequences are exactly the same.

RSUs are cash equivalent from tax purposes. They are taxed at market rate at vest time. If you sell at that moment and buy other stock it has the exact same LTCG treatment. It’s also the same as if you are compensated in all cash and go buy stock with that.

It’s like cash if you got more when the share price is higher.

It can also be a cash flow problem if you have to cover quarterly estimated tax in between trading windows. My day job sells and withholds 22% of my vesting RSUs, because that’s the statutory rate for supplemental wages, but I always owe about 10% more.

There is no tax advantage for the employer or the employee. Your scenario A is incorrect because you pay income tax at time of vesting, as the other comments pointed out.

> Sure, but the stock price would tank (note that the current multiple assumes growth), employees would leave due to poor compensation, and starts a downward spiral.

This assertion presumes that it is impossible to propose any form of compensation that's enticing without involving stock. This is not only baseless but also flies in the face of reality, as other tech companies, including other FAANGs, barely offer any stock and still manage to attract top talent.

> This is not only baseless but also flies in the face of reality, as other tech companies, including other FAANGs, barely offer any stock and still manage to attract top talent.

Which one?

Netflix is known for having all-cash offers.

Netflix is pretty much the only FAANG that does that. Every other large tech company has generous stock grants, and as you pass a couple years of experience your stock will generally be larger than your cash compensation.

> Netflix is pretty much the only FAANG that does that.

Netflix is also 20% of FAANG companies, so that's not as lonely as it sounds.

Right, but they're a strange company that just happens to be in FAANG. Pretty much every other large company, in the FAANG acronym or not, will give you equity.

In the context of this discussion, it is more useful for FAANG to mean any tech company or tech adjacent company employing a lot of software engineers with comparatively high pay, in the form of cash or cash + stock.

Netflix is in FAANG only to make the acronym nicer

You could pay them in other means, but there were constraints there are obvious constraints that I did not spell out. We are assuming a non-growing company that now needs to pay extra cash to you top up employee comp with cash. Your margin will start to shrink, and so does your earnings (the premise was no growth, remember), continuing the downward trend of your stock.

Plus, your competitors are not sitting still. People will go work for the more exciting companies even if you pay them equal amounts anyway (to vary their type of work and grow their careers) rather than staying and watching the thing die and doing the same thing for 30 years.

They could achieve good multiples by paying dividends. The question is whether they're wasting as much money trying to grow as they are saving by keeping their profits offshore (and not paying tax on them). I don't know, but at some point the answer may become obvious.

Owners do not want dividends. I do not want dividends from my tech stocks if I’m simply going to turn around and reinvest in them. That is just paying extra short term capital gains taxes when you do not have to.

Qualified dividends (which represent the vast majority of them) are taxed as long-term capital gains to avoid this concern.

True, but it does not seem like investors are clamoring for dividends either way. Personally, I would just take the dividend money and reinvest it so it’s all the same to me.

This is what people seem to forget. A company that doesn't grow for all intents and purposes is a dead company. Or in the M&A world we call it "distressed". It doesn't matter how profitable you are if you don't get grow there are serious implications - employee motivation, loss of talent, erosion of customer services, etc.

I don't see how employee motivation, loss of talent, erosion of customer services are related to the need for unyielding year on year growth.

There are companies out there, private ones, where their customers are happy, their employees are happy (most of the time) and their retention is high.

Without growth, the only way to get promoted is to get a spot of some higher-up who left the company (or retired/died). Whereas, in growing companies, there are new senior/management positions created all the time, to account for the growth - so, getting promoted is easier.

Ambitious, hard working people like promotions, so they gravitate towards growing companies and not stale companies.

> Ambitious, hard working people like promotions

Ambitious maybe (though that's nearly the definition of ambitious). Hardworking, not necessarily. I know a cement guy that you have never in your life worked a harder day than who has never received a promotion nor even sought one.

So is there anything to be done about it? How to avoid companies being compelled to seek growth always, to the detriment of their internal functioning/culture?

As far as I can tell, don’t go public or be a regulated utility.

Ambition and hard work are hardly the same thing. Many people work hard at their job, are paid a good wage, and are satisfied with their job, rather than constantly seeking a promotion. Constant promotion seeking isn’t admirable, it’s just greed.

Am I the only one who thinks this sounds a lot like how pyramid schemes work?

> There are companies out there, private ones, where their customers are happy, their employees are happy (most of the time) and their retention is high.

Companies that aren't growing? I meet A LOT of companies (about ~50 or so a year) and I can tell you there is massive difference between the distressed ones and the ones who are growing. btw - even 2~5% growth is fine, it doesn't need to be 25% google scale growth...but flat or declining is bad.

There are plenty of small private companies that more or less plod along year after year--small consultancies and the like. You're not going to have the level of compensation and opportunities you have at a large profitable growing public firm but you may be OK with that. Obviously declines are bad and, in any case, compensation will probably be a fraction of Google etc.

I hate how hn top threads usually degenerate into something totally unrelated to the original posts.

This seems like a popular and reflective comment, but this is a very cultural idea in my amateur opinion. It seems like this -needs- to be so, and many do so because of that belief. But in reality it is a self perpetuating hamster wheel of burn out bliss a company is setting itself up for.

It's not cultural at all -- it's economics.

Businesses are valued based on discounted cash flows (DCF). If you're profitable and not growing, your cash flows are very stable & easy to evaluate -- you get a low P/E or P/E/G ratio. But if you're growing quickly with sane unit economics, most of the DCF value is in future years... which then results in much higher multiples relative to today's revenues & earnings.

So is there anything to be done about this? It seems from this thread that the conclusion is that companies cannot avoid constantly seeking growth, and yet that growth ultimately destroys internal social mechanics / culture.

It can only not avoid it because that’s how the deck is stacked. Different rulesets would give different outcomes. Just because we are riding one certain economic theory, does not mean its the only way of value creation.

So? Who needs that?

Not the company, unless selling stock to raise cash.

Not the employees, if paid in cash instead of funny money.

Nobody needs that.

It's cultural.

Politician wins election by promising lower taxes by assuming greater investment returns hence requiring less money to be set aside for defined benefit pensions.

People see other people’s wealth growing quicker because their investments grew more, increasing demand for higher growth investments.

Population growth inherently leads to economic growth assuming a sufficiently stable society and access to resources.

All of these create an environment where people expect certain ROI and make plans according to those ROI.

It's about stock price and bonuses, in public companies. The only metric that a board of directors can use is stockholder welfare. That's their primary fiduciary duty, according to law these days.

So, what to bonus the CEO on? Stock price appreciation. Stock price valuation loves growth. So even though a flat business throwing off 10% profit is a very nice business to be in, the only way you can increase stock price is to grow margin, which is really hard and attracts competition. Ergo, CEO is going to try to grow the company to boost the stock price. That's one reason dubious mergers are pursued, as it at least will goose revenue and profit. Wise investors might use return on equity or capital as well, but the market in general biases towards the revenue and profit metrics. Stock goes up, CEO gets their bonus.

For a private company, slow or flat growth with a nice profit margin is great, and without having to favor growth at all costs for pesky stockholders and analysts, you can pick and choose when a good opportunity comes along, and grow a bit anyway.

You could compensate the employees with things other than stock

> Maintaining existing services

Everything a capitalist market teaches us is against this, if they don't obsolete themselves before somebody else can then they will fall into obscurity and ultimately lose what they've built, just like other companies before it who didn't.

FAANGS companies aren't at fault for when they're winning a game which is rigged from the start.

> if they don't obsolete themselves before somebody else can then they will fall into obscurity and ultimately lose what they've built, just like other companies before it who didn't

And if they do fall into obscurity and ultimately lose what they've built?

- The companies who take their place service the customers/clients they used to have

- The workforce either coast along or move to the (presumably growing) new big boys

- The investors should spot the decline and trade away

The only downside is the company - the brand - slowly dies off. For most of us that is fine; the only parties to all this who will actually lose out are the ultimate beneficiaries/owners, and I can live with that. And presumably they've extracted masses from the company by then anyway.

Its both cultural and economics, but the economics only affect the masters and not the minions (who find alternatives) and the cultural aspect is misguided - individual companies/brands are ephemeral and irrelevant so we the minions should not be invested in protecting them at the destructive (to society) costs of scale.

According to Peter Thiel, Google is a de-facto monopoly in search-engines and online advertising (apart from social media). I think that's an accurate take. They are in this position because of their "winner takes it all" attitude. So to say they would "easily survive" is short sighted as well as ignoring where Google came from.

>most business in the world survive

While this may be the case for capital-intensive businesses (oil, consumer goods, energy), this is usually not the case for intangible-asset businesses (media, tech). In the former, the assets will generate cashflow, whereas in the latter it's a people-centric model

What was the last time you chose yahoo over google or altavista over google?

Google was always greedy, but when it was small it was cool to be the disruptor. Now it's perceived as only greedy. This is typically the case for any successful company (from HP, IBM, to the new 'big tech').

Good (related) book recommendation btw: capitalism without capital

> and no market is really a "winner takes it all"

Market for OSes for PCs (not Macs) is a great example. Windows has what, 98% market share there? It got there thanks to the dynamics of this particular market, which is totally a "winner takes all" one. In particular, if Microsoft were more relaxed in 80ties and 90ties, there likely would not be Microsoft or Windows at all today, and everybody'd be using Os/2 Warp or BeOS or something else on our PCs.

> OSes for PCs (not Macs)

If you slice the market thin enough anything can be a monopoly. This particular distinction seems pretty arbitrary to me.

I agree but even if you throw Macs in there, the Windows marketshare is probably still over 90%. Maybe a bit lower if you include Chromebooks too.

You could buy a computer with MacOS installed. You almost couldn’t buy a computer with OS/2 or BeOS installed, because Microsoft would threaten your OEM with a punitive price hike for Windows licenses the majority expect.

There are billions of PCs in the world, it's hardly a thin slice.

> No, Google would easily survive if they focused on maintaing existing services and making the headcount stable instead of increasing.

No such thing. In capitalism you are either growing or dying. Stagnation means others will grow around you, and relative to them you are shrinking in the same market. Thus, stagnating == dying.

Call it greed if you want, but this is just the emergent result of the economic system we have in our society. Corporations are optimization algorithms to maximize revenue. Not because they have to, but because its comprised of rational individuals who are incentivized to maximize their own revenue. The natural result is an ever-growing entity, adaptive to dangers and emergently intelligent. It's possible to run a corporation differently but it actively takes energy to resist the natural gravity of every individual's interests.

This does not seem too dissimilar to a country or tribe’s leader promising their constituents a better life in the future. And I cannot imagine a country/tribe selecting a leader that does not promise progress and growth over one that does.

I'd far rather live in a country where the rulers choose not to start wars for territory, especially if we were the richest country in the World. I'd have guessed that would be common.

Indeed as one of the richest countries, with global climate change, the responsibility is to lower consumption (which many would see as reduce the standard of living). But maybe the analogy doesn't stretch that far.

>I'd far rather live in a country where the rulers choose not to start wars for territory, especially if we were the richest country in the World. I'd have guessed that would be common.

If it was common, then they would not have gotten to be the richest country in the world in the first place. The same game plays out over and over in nature where the one that fights for resources gets more of it, and while they can choose to stop fighting for it, in the long run they will not be the survivors.

Cooperation works best if the goal is maximizing the average return over all participants in the game, but inevitably, tribes will split off and start prioritizing their own populations over others. On a global, national, and even familial scale.

That’s only true if you are currently under threat of not being at the head of the pack. Google still very clearly leading search, which is their main income provider.

There are countless examples of companies who used to be at the head of the pack and seemingly not under threat. Blackberry, Nokia, Kodak, Sears, IBM, Xerox, etc.

A common sentiment on this forum is that companies who fail to keep challenging themselves and get complacent on rent seeking from one product/service will eventually lose to an upstart.

The trillion dollar companies won't be able to survive? They're in danger? I simply cannot muster any sympathy.

Actually I think they're not in enough danger. They take things for granted, our attention and private information for example. Denying Google, Facebook those should put some real fear in them.

Is there anything significant about a trillion dollars in 2021? Was it not $10B+ in the 1980s and $100B in the 2000s?

https://www.youtube.com/watch?v=Z93yWXb9Tb0

I do not know what you mean by sympathy, I am just opining on the economic reasons for why successful businesses keep trying to expand, and that is if they do not, then they risk falling behind.

When you live long enough it becomes evident that scale in tech is a pandemic. At a certain point greed inevitably takes over. I believe there's some kind of a threshold beyond which a company has no choice, but to turn evil.

It is just my personal opinion, but I think that it is what is going on with gitlab now.

Can you elaborate on that? Why do you think is Gitlab turning evil?

It is not necessarily evil, but corporate interest led.

When it was created, gitlab core value was to be the open source alternative to GitHub. Then, it started to add light premium features.

Now, free versions have a lot of frustratingly limited features with nag screens to push you to subscribe. The free core is less and less a priority and less and less sufficient.

After the ipo, things will get even worse. Most of new shareholders (Ie owners) are just profit led. It's an investment for them and they will want the net result to grow at whatever cost.

Management has no choice else than to follow what shareholders require.

So, if it is economically viable, nothing prevent gitlab to stop new versions to be open source if they think that will make them more profitable.

> And scale is simply because greed.

This seems over simplified. A large company is a complex system that is shaped by all kinds of forces. I'm not sure we can attribute Google's scale to a single heinous factor

Well, the state of the Internet has changed fundamentally over the last years where now most traffic is going through a small number of portals. Also, we were not that thoroughly tracked 10 years ago. Fundamentally, I believe that the ad-tracking economy of the current version of the Internet is the wrong direction. And, I hope (and work actively on) that we will find more effective ways to earn money on the Internet.

In the US, the vast, vast majority of people have effectively no upload capacity and are behind huge CGNATs. I do not see any alternative future until the vast majority of residential dwellings have quality internet connections providing symmetric up and down bandwidth (i.e. fiber to the home) and ipv6.

Only then would people be able to roll out peer to peer solutions that bypass the big tech companies.

I don't really buy that argument, because google is still the only IT company which supports long term R&D, like dart, flutter or fuchsia. Of course they can afford such boutique projects, but the good thing is they do.

My idea is still the wrong PM incentive structure, which is harming the work culture and projects.

Microsoft has a pretty good reputation for investing in research too.

Can you shed some light on what the right and wrong incentive structure looks like?

If Google doesn't take that next $200bn share in ad revenue over the next 5 years, where else will that revenue go? What about the additional $400bn of potential growth 5 years after that?

Somebody in the online ad space is going to eat that conventional ad revenue, or "build that value", or whatever we want to call it. If it isn't Google it will be Facebook, or Twitter, or Apple, or Tiktok, etc.

What happens to Google if Facebook has a $1tn online ad business in 10 years time, and Google's ad business is still 'only' worth their current $200bn?

This is absolutely about survival. In a super high-growth industry, you grow or you die.

> This is absolutely about survival. You grow or you die.

How? With that argument, neither Facebook nor any other ad networks would already be dead since Google basically owns the space already, but they are not, they are also pulling in huge profits, just not as huge as Google, but they are still well off.

The others are surviving because they are growing too. If they stall out and stop growing, they will become a smaller and smaller slice of the pie as the rest of it grows around them. They would become less and less relevant, and therefore find it harder to get new business.

In a high growth business there is no stable static strategy. Staying the same is functionally equivalent to shrinking, in terms of scale effects and relevance, as the rest of the market dwarfs you. As long as you keep growing, you can keep relevant.

If facebook had a $1tn ad business and Google still had $200bn, would Google's business actually be the same as it is now? Would they still be able to hire the cream of graduates? Would they find it as easy to replace lost business from natural attrition with new clients? Would they find it as easy to launch new ad products and get attention for them?

Do you have sort of research/statistics that backs up your statements or are you just echoing what you've heard others say about these "high growth businesses"?

It's basic math. If you are 20% of the industry right now and stay the same size while the industry grows 10x, you become 2% of the industry and a essentially a non-factor. You've yahoo'd yourself.

Basic math right, so if you're 20% of the industry, earning 20% of the industry profits at that scale, and the industry grows 10x, then you have a smaller piece of the industry but your earnings remain the same as the profits grew as well.

I don't have statistics but it's, frankly, blindingly obvious. In a rapidly growing market, staying still as a business isn't a static situation because the landscape around you is changing. You're shrinking in relevance to customers. Even if your margins stay the same, your competitors margins are going down as they scale up, which means they will undercut you on price and you won't be able to do anything about it.

The premise of this discussion is static revenue, but you can't assume that. You'll have to work harder and harder just to stand still, until it becomes unsustainable. You might be able top sustain a business by focusing on a niche specialist market segment, but at that point you're not recognisably Google anymore. As for greed, that's an incredibly naïve way to view it. Nobody creates a long term business plan that aims for irrelevance.

Let's pray they don't start to manufacture paperclips.

Scale kills them all except for Apple? There is a comment somewhere here saying that levels at Apple are private.

This seems to be an interesting concept to keep a somewhat flat hierarchy.

There’re private in a sense that there isn’t internal registry where you can just look up anyone like at google. From what i can observe over years apple has almost exactly same perf culture as google and any other similarly sized company in the US

Interesting. Thanks for sharing.

Why are they still able to continuously pushed out great products and keep innovating? What’s your hypothesis?

> Why are they still able to continuously pushed out great products and keep innovating? What’s your hypothesis?

Big assumption that Apple is indeed innovating right now. Yeah, M1 was a great innovation, but before that, the iPhone was the previous innovation. Everything between has just been iterations basically, so I disagree with your assumption that Apple is in-fact highly innovative.

Any tech company would toss a limb for those "iterations". Aluminium unibody, stacked battery tech, MagSafe, ECG for watch, and much more.

Not sure I'd call taking existing technologies and putting them in laptops/watches innovation rather than iteration on existing stuff, but we're all different so it's all good.

Can you please list some technologies or products that you think were innovations in the last 15 years?

My recollection of the time window is wrong, but I’d say microprocessors, then smartphones were fundamental. Chips ate both minicomputers and mainframes, and the smartphone totally altered how people interact with computers. Tablets are just big phones and watches are just smaller subsets. Software wise, the web. The net is old but it took the web to make it explode.

What am I missing?

Innovation is literally taking technology and making it practical.

By that logic, the M1 was just packaging an ARM CPU in a laptop and the iPhone was just stuffing a SIM card in a PDA.

If that's all it is, why isn't everyone doing it? And to the extent that they are doing the same sort of things, why are Apple taking on the order of 90% of the profits in multiple market segments? Clearly they are doing something different.

Don't know why you're being downvoted. This is objectively true.

What is the objective definition of highly innovative?

I dunno...

> Yeah, M1 was a great innovation, but before that, the iPhone was the previous innovation.

Watch and AirPods are literally the most popular and profitable products in their market. The iPad dominates, too.

Google has no problems innovating on their ad backend and infrastructure you just don’t get to see it bc you’re not a customer - you’re just part of their product

> From what i can observe over years apple has almost exactly same perf culture as google and any other similarly sized company in the US

Right, if you look from very far away and put "all large US company" in the same bag.

Otherwise, if you zoom on "Silicon Valley Tech Companies" then Apple and Google's perf process and associated incentives look quite radically different in many aspects.

As a normie I sometimes wonder what happens to FAANGlers(googlers + other FAANG). You are used doing things the FAANG way and been doing it for a while and now it’s too late for you to learn how the “rest of the world” does so how does one adapt? Just curious. I find it hard to believe that one has transferable skills after doing time at FAANG.

Well paying jobs typically don't look for people with experience in specific technologies, rather they look for people with experience in relevant domains. And the domain experience you learn at FAANG is worth a ton, lots of companies wants to be more like FAANG.

Example: You are making a search engine, you use technology X. Would you rather hire a person who worked on Google search but didn't work with technology X, or would you want an expert on technology X?

In my recent interviewing cycle I got dinged in most interviews for not being a React expert. Every panel knew going in that my React experience was recent and limited. I have 4+ years of relevant domain experience at a FAANG on my resume. I laughed with interviewers about how every few years the de facto tech stack changes and every team I've ever joined required me to learn completely new (to me) frameworks. Still got dinged.

I wish what you're saying was the truth but I think it's very much the minority.

HTTP requests work exactly the same on the other side. If anything some ex-faang have an edge as they generally see many trends years before they permeate the wider industry

If they don't grow revenue the stock won't go up. Most big companies are organized around "STONK MUST GO UP". I could justify this with smarter sounding words and more detail but in essence thats all it is. We literally organize large parts of society to make charts go up. It is insane.

> We literally organize large parts of society to make charts go up. It is insane.

The alternative is to not borrow from the future. Then your country/tribe is at a severe competitive disadvantage on the global playing field.

Revenue growth means customer growth which means more people benefit from google’s product (advertising). This is not some sort of bad thing.

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