I think those people miss the point that not all engineers are working on the core products. For example, as one grows they need to have a dedicated HR teams.

I think those people miss the point that not all engineers are working on the core products. For example, as one grows they need to have a dedicated HR teams. These teams will demand for a HR software to make their life easier. If the software is an on premise solution then you require engineers to manage that software. Most HR systems require a RDBMS backend, so there is an additional need for a DBA. As this adds to the company, there is a need for a hosted Identity Management solution, which again requires dedicated engineers...so and so forth. While there are many reasons for a company to be loosing money and most of them are related to building a sustainable business, from an engineering point of view it has a lot to do with hiring. Companies with lot of cash want to hire talented engineers and there is nothing wrong with that when getting the company off the ground. But as they grow the talented pool they can hire from gets smaller. So either they start overpaying for a great talent or offering above market rates for a mediocre talent. Its mostly the latter people who offer negligible intrinsic value while getting boat loads of money.