3 ms·

Efficiency? More like profit margin. Labor intensive industries can be very profitable, provided the scaling is efficient.

• enjo 17y ago
  No.. efficiency. Your margin is relative to your total costs, of which employees are generally not even a large fraction. For instance take a site like Photobucket, they have a relatively small headcount (~150'ish I believe, most of which are not developers). Their cost drivers are infrastructure and bandwidth which I imagine is in the millions/month. This is a (very) rough measure of how efficient you are in terms of generating revenue. Craigslist is a big site, if they only have 30 employees (as cited above) than I have to imagine they have huge parts of their day-to-day operations automated. That's efficiency.
  • _delirium 17y ago
    "Efficient in terms of generating revenue" (per employee), sure, but that isn't the usual definition of economic efficiency. In particular, there's no real reason, when looking at a company's efficiency, to look at only a raw count of employees, and not take into account things like how much those employees cost, and what your non-employee costs are. A company with half the employees but orders of magnitude more infrastructure costs and lower profits, on the same revenue, isn't more efficient, even though it would rank better on this metric.