8 ms·

The Elves Leave Middle Earth – Sodas Are No Longer Free (2009)

105 points by RKoutnik 10y ago

CarolineW 10y ago
(2009) That's not to say that it's no longer relevant. It is relevant, perhaps even more so now. But it was written in 2009. Have things changed?
- joezydeco 10y ago
  Nothing really. This story comes up all the time. https://news.ycombinator.com/item?id=11635066 https://news.ycombinator.com/item?id=11635066 HN doesn't have "sticky" posts, but sometimes you wonder if it should.
  - CarolineW 10y ago
    It's been submitted a lot: https://hn.algolia.com/?query=Elves%20Leave&sort=byDate&dateRange=all&type=story&storyText=false&prefix=false&page=0 https://hn.algolia.com/?query=Elves%20Leave&sort=byDate&date... Massive discussions: https://news.ycombinator.com/item?id=5751329 https://news.ycombinator.com/item?id=5751329 https://news.ycombinator.com/item?id=1007750 https://news.ycombinator.com/item?id=1007750
gopalv 10y ago
> It’s about the company’s most valuable asset – its employees. There are often two ways to look at that statement. Employees aren't fungible and how that cuts both ways. The longer someone works in an established company the more tribal knowledge they accumulate to the extent that an equally talented fresh face cannot replace. And the other is that some employees have already done their part & are now not easily moved into a different role (Peter principle or otherwise). That fine line is somewhat scary to look at, particularly when you work in a boom-bust environment like a video game company or when the company does a tough pivot.
peterwwillis 10y ago
I still don't understand why companies would willingly serve free drinks (and snacks) that they know will only deteriorate the health of their employees. Free drinks, sure, but 290-calorie cans of sugar, and bags of fat? Say what you will about adults having free will to make bad choices, but your company doesn't give away free cigarettes.
- maxxxxx 10y ago
  In my company whenever they pay for lunch it's always bad food. Bad pizza, greasy sandwiches, junk food. I don't understand why can't order some decent food.
  - dsr_ 10y ago
    It's probably a default setting. Go find the person who ordered the food, and give them menus from four or five decent local restaurants. In my experience (Boston area), people will happily eat Middle Eastern, Chinese, good Italian, northern and southern Indian... and, in general, will be happier with something different from the last time.
- deleted 10y ago
  [deleted]
- dsr_ 10y ago
  Right next to those are generally the free diet sodas, the free seltzers, and the free teas and juices. Next to the chips and candy are the protein bars, trail mix, nuts, and fresh fruit. Over in the cafeteria, next to the free pizza is the free salad bar. With any luck you've got a range of employees. Some are concerned about their weight; some are concerned about getting enough vitamins; some really really want a boost of sugar and caffeine. It's possible to cater to all of them.
  - peterwwillis 10y ago
    Some really need a cigarette. Would you provide cigarettes in vending machinea?
kevin_b_er 10y ago
> Some had already been irritated when “professional” managers had been hired over their teams with reportedly more stock than the early engineers had That right there is a huge warning sign that they're not valued well and that they never were.
- hkmurakami 10y ago
  That's every post series A VP hire.
- mooreds 10y ago
  Wait. I know all about having dunderheads hired above me, having gone through the dot com bubble and crash. But are you implying that no VP should ever be hired over the early engineers? I can imagine numerous situations where doing just that would provide value to the engineers and the company. And an experienced VP, even if expensive, can be a bargain if they've "done this before".
mcguire 10y ago
"It never ceases to amaze me how many startups make the mistake of killing off the free drinks." (One of the comments on the page.) But wait a minute. Killing off the free drinks is just the signpost. The change is primarily in the size and the culture of the company itself. Charging for sodas might be the first, but it isn't the biggest change that the company is going to, and going to have to, make as it grows. Does anyone really believe that IBM, Amazon, Facebook, or Google would still be their happy fun startup selves if they still gave away free sodas?
- kylec 10y ago
  I would be shocked if Amazon, Facebook, and Google don't still give away free sodas.
  - Jach 10y ago
    Amazon, among several other infamous reasons to not work for them, does not provide free soda or snacks.
  - davidw 10y ago
    Or perhaps in the case of Google, something a bit healthier and more expensive than sodas? Those things are pretty bad for you.
  - serge2k 10y ago
    Amazon doesn't. Facebook and Google both give away free food, so I can't see why soda would be a problem. Microsoft has free soda and the food is fairly cheap.
    - mikestew 10y ago
      Microsoft has free soda and the food is fairly cheap. Eh? Could have changed since I was last there eleven years ago, but in the last four or five years of my tenure I rarely ate in the cafeterias because for less money I could get more and better food within a five minute walk. And I got to go for a walk at lunch. (So I guess I'm talking on the order of fifteen years ago. Never mind the old man in the corner mumbling to himself about how it was better, er I mean worse, back then.)
flinty 10y ago
Is this in response to the bloomberg article on how the new CFO over the past year has been cutting moonshots?
dpandey 10y ago
Small perks like free lunches, gym membership or a massage every month are huge in making employees happy. We're a seed funded company and provide free lunches to our employees. We also reimburse up to 100$ a month for fitness/gym memberships. Some of my friends working in large organizations don't get these perks, and point out that they're wasteful of a company that is cash flow negative and trying to conserve capital. What most people with such mindset don't realize is how valuable inspired people can be. For employees to be inspired, they must do work they find meaningful and they must be appreciated and challenged. But they also must realize the company genuinely cares about them. Then they want to give back to the company; they want to exceed expectations because they love how the company cares about them. Now you need to show care to employees on an everyday basis, but one amazing way to show it is with perks like these. 100$ a month for gym or 200$ a month for lunch per employee is not outrageous if you compare that with how much you pay them every month. It's almost miniscule. Also, in most startups at least, they're getting paid below market rate in exchange for equity etc. Not having to worry about lunch or gym everyday makes a huge difference psychologically. The one situation where you can justify cutting perks is when the company is going through a genuine crisis, cutting the perk is critical to get through, and you let everyone know this is temporary and it's just something we all must do to get through this crisis. Otherwise, instead of trying to cut soda out, the management needs to focus on growing revenue and profits and ask themselves why they're not succeeding there as much as they'd like to. Hiding behind a soda cut isn't going to fix the issue. PS: I used to worked at Salesforce where we got several days a year off just to go volunteer time at non-profits. You'd be amazed at how much employees love the company for allowing them to do things non-work related that they're passionate about just a few days a year while getting paid for it. It says that the company has a warm heart. The impact shows up in the company's relentless growth year after year. Same with companies like Costco. Showing care for employees has an outsized impact on the bottomline.
- KON_Air 10y ago
  It really sounds like something between modernified Fordism and in-setting cyberpunk horror story.
- ChuckMcM 10y ago
  I tend to agree with this perspective but I don't think anyone has managed to actually create an experiment to study it. (perhaps if two startups in the same space had diametrically opposed benefits you could use their market share or productivity as a comparison metric). There is also something tribal/instinctual about sharing food. Buying lunch two or three times a week for the team will bond them better paying them cash. And a well bonded team is a higher performance team. That you can measure with your sprint planning. The downside is that it is disproportionately impactful when you take food away. When Crawford Beverage (HR VP at Sun) discontinued the company beer bash (and it was just popcorn, chips, maybe some vegetables with ranch dressing and beer, not even a lot of food) it permanently scarred morale.
imagist 10y ago
> The most talented and senior engineers looked up from their desks and noticed the company was no longer the one they loved. This is well-worded. The problem for these execs wasn't that the company was no longer a good place for engineers. The problem was that the engineers noticed. Don't be the engineer who doesn't notice their job sucks until they start charging for soda. By that point you've been working for a terrible company for a long time.
pascalxus 10y ago
What? They quit the company because they no longer got free sodas? I'd rather have an extra 300$ of salary per year, than free cans of Sugar all year. And, if the best developers have so much bargaining power as to leave, just because of sodas, why aren't they leaving toxic work places like Amazon in droves? Other places are cutting cost in far more profound ways: laptops and computer equipment, etc.
- anthony-james 10y ago
  I think it's more of anticipation for the future. If a company cuts overhead for something big, say, a corporate holiday party from $100k to $80k, some may be frustrated, but it's probably because they recognize the waste in hosting at the Ritz instead of the Hilton. It doens't necessarily mean salaries, benefits, or other, smaller, things will be cut, but it's sending a message that the firm cares about fiscally sustainable operations. If a company cuts costs of the little things, all of a sudden everything is put on the table. Stock options, salary, benefits, perks, headcount. It sends the message that the company cares about operating today more efficiently than it cares about growing (because no company would stop investing in employees if it could still grow, because good employees make good products). Companies cut small costs because they believe that their product/market fit has reached the final destination and the only way to grow profits is by cutting. The best firms (and by extension, employees) realize that the best way to grow is always up.
- gdulli 10y ago
  > why aren't they leaving toxic work places like Amazon in droves? They are leaving Amazon. http://www.ibtimes.com/amazoncom-has-second-highest-employee-turnover-all-fortune-500-companies-1361257 http://www.ibtimes.com/amazoncom-has-second-highest-employee... The point here is that it wasn't the sodas that made them leave. The sodas were a tangible, visible thing that made them evaluate everything else, which also wasn't good.
- zhemao 10y ago
  Did you read to the end of the article? > The engineers focused on building product never noticed when the company had grown into something different than what they first joined. The sodas were just the wake-up call. As for why engineers aren't leaving Amazon in droves, Amazon actually has pretty high turnover. The average employment term for engineers is 18 months. So engineers are leaving, but there are more engineers replacing them. Newly graduated engineers join big name tech companies like Amazon, Google, and Facebook to boost their resumes before going on to do other things.
anthony-james 10y ago
As an accountant, I feel like employees are severely underpaid in highly-skilled markets (like tech, not accounting), and I think that companies don't actually capture the true cost of a single full time employee. Most see a salary, benefits, fringe costs (like hiring HR and finance teams), lunches, etc. Some of the better firms add in the cost of hiring employees with intangibles, like communication, poise, and professionalism, but the truly great see the largest potential cost - that they do better work at a competitor. If you're paying an engineer $100k to add 150k worth of value to your product, the true value of their work is $300k: $150k worth of value to you, and $150k worth of value that isn't added to your next closest competitor. It's the same reason football teams say "defense wins championships" - because Defense is the only position where you can simultaneously score points and stop your opponent from scoring. Offenses can only score. Now, that employee shouldn't be paid $300k because that's the true value for the organization, rather, they should be paid as close to the marginal benefit they directly apply to the organization - in this case, $150k. Doing so may be a breakeven point from a cash perspective, but a billion dollar company that breaks even is worth more than a lemonade stand making $10 profit. From an accounting perspective, this can be observed as employee expenses (temporary equity accounts) providing value to products (permanent asset). When the employee is terminated, the assets still remain, so for anyone with any equity stake in the firm, it is beneficial to pay as much as possible up to the point that the company a) doesn't run out of runway, b) retains talent to further grow the assets and c) doesn't grow competitor assets. The CFO that cut soda costs by $10k also boosted the equity of all the competitors that hired the disgruntled employees - and most likely by a value greater than $10k, and multiplied by each employee that left. Just my $.02 Edit: Cut soda costs by $10k total, not per employee
- feral 10y ago
  If you're paying an engineer $100k to add 150k worth of value to your product, the true value of their work is $300k: $150k worth of value to you, and $150k worth of value that isn't added to your next closest competitor. That model seems to assume: - every employee who leaves will go to close competitors - their work for that close competitor will be perfectly zero-sum to their work for your company - the next best replacement employee your competitor would otherwise hire would be worth 0 to them
deleted 10y ago
[deleted]
everyone 10y ago
The free soda n junk in startups is bullshit. I'd rather get paid a little more and spend that on what I choose (something healthy). Who would be enticed by that? What is enticing to me is the freedom to work how/where/when I want.
- Fnoord 10y ago
  Agreed. TANSTAAFL, and I guess it is the old left (as in everyone equal) vs right (free choice) debate. We get free bread for lunch. Cool, but I don't wanna eat bread. Coffee is free. Cool, but it is bad quality, my el cheapo espresso machine at home is even better. Plus I'll experience a massive down in the evening. Oh hey, not the employer's problem. I've never seen free soda anywhere, but the thing is: it is just a lot of sugar, with too little water. I won't drink that if I get paid for it. At least water is free, and that's important in the summer. I'm free to go grab a cup, and the walk is healthy, too. Then there's these parties 'for team spirit', with all kind of fried food. Cool. Guess who pays for that? Screw all this. Like you said; "I'd rather get paid a little bit more."
  - aoeuasdf1 10y ago
    I agree with you - but there are two advantages to giving perks like food: No transaction costs. Not just the actual monetary cost of the transaction, but no need to employ people to man registers, no need to wait in line to pay. And more subtly, no need to argue with yourself about whether it's worth it to buy the item you are consuming. Secondly, these perks are bought in bulk and provided without having to pay income tax on them. So it's just cheaper than paying people more and having them buy the goods. That being said, I do wish there were more healthy options by default.
    - everyone 10y ago
      An additional point as to why I dont like this.. I'm busting my ass in the code mines making this amazing software thats making us all money. Then 'management' waste it on frivolities, like free junk food, booze, time wasting exercises, stuff that they like. It also means they may be unthinkingly following the silicon valley style 'startup' stereotype, which is actually almost depressingly ironic. Anyway, its not a big deal, but that stuff is a warning sign for me.
gdulli 10y ago
My company is just about to make a mistake like this. It's sad to know it's coming and watch it happen in slow motion.
desireco42 10y ago
This old, famous article from Steve Blank... not sure what to make of this? Did Google started to charge for it's meals or something?
pdimitar 10y ago
The thing that irks me about ALL of the places I ever worked at is that they prefer to shower you with benefits like [small partial] free dental, gym memberships, food stamps, and what not. It seems nobody ever stops to think "Hey, our employees are ADULTS, right? How about we just give them all these money as a flat paycheck increase and let them decide what to do with them?". I switched desires many times in my life. Sometimes I've been going regularly to dentists, other periods I've been going to the gym, and then I have been eating twice a day for months -- and half a year later I wake up to the fact that it's much healthier to eat 5-6 times a day (but food stamps don't cover for more than 1 meal), and then a year later I figure I simply want to watch most of the modern sci-fi TV shows in several huge binge sessions. Examples abound from mine and many others' experience. These organizational policies are pandering to the common lowest denominator. THIS IS ABSOLUTELY FINE. The part that pissed me off in many of my office jobs in the past is that the managers fail to recognize the people who don't want their free things and would prefer another format of loyalty bonuses. The biggest failure of the management in organizations like those in the OP is the fact that these people are under the illusion that they can shoehorn their people into strict processes during one big effort session, and then never do management ever again. This never works.

105 points by RKoutnik 10y ago

(2009) That's not to say that it's no longer relevant. It is relevant, perhaps even more so now. But it was written in 2009. Have things changed?

joezydeco 10y ago
Nothing really. This story comes up all the time. https://news.ycombinator.com/item?id=11635066 https://news.ycombinator.com/item?id=11635066 HN doesn't have "sticky" posts, but sometimes you wonder if it should.
- CarolineW 10y ago
  It's been submitted a lot: https://hn.algolia.com/?query=Elves%20Leave&sort=byDate&dateRange=all&type=story&storyText=false&prefix=false&page=0 https://hn.algolia.com/?query=Elves%20Leave&sort=byDate&date... Massive discussions: https://news.ycombinator.com/item?id=5751329 https://news.ycombinator.com/item?id=5751329 https://news.ycombinator.com/item?id=1007750 https://news.ycombinator.com/item?id=1007750

gopalv 10y ago

> It’s about the company’s most valuable asset – its employees. There are often two ways to look at that statement. Employees aren't fungible and how that cuts both ways. The longer someone works in an established company the more tribal knowledge they accumulate to the extent that an equally talented fresh face cannot replace. And the other is that some employees have already done their part & are now not easily moved into a different role (Peter principle or otherwise). That fine line is somewhat scary to look at, particularly when you work in a boom-bust environment like a video game company or when the company does a tough pivot.

peterwwillis 10y ago

I still don't understand why companies would willingly serve free drinks (and snacks) that they know will only deteriorate the health of their employees. Free drinks, sure, but 290-calorie cans of sugar, and bags of fat? Say what you will about adults having free will to make bad choices, but your company doesn't give away free cigarettes.

maxxxxx 10y ago
In my company whenever they pay for lunch it's always bad food. Bad pizza, greasy sandwiches, junk food. I don't understand why can't order some decent food.
- dsr_ 10y ago
  It's probably a default setting. Go find the person who ordered the food, and give them menus from four or five decent local restaurants. In my experience (Boston area), people will happily eat Middle Eastern, Chinese, good Italian, northern and southern Indian... and, in general, will be happier with something different from the last time.
deleted 10y ago
[deleted]
dsr_ 10y ago
Right next to those are generally the free diet sodas, the free seltzers, and the free teas and juices. Next to the chips and candy are the protein bars, trail mix, nuts, and fresh fruit. Over in the cafeteria, next to the free pizza is the free salad bar. With any luck you've got a range of employees. Some are concerned about their weight; some are concerned about getting enough vitamins; some really really want a boost of sugar and caffeine. It's possible to cater to all of them.
- peterwwillis 10y ago
  Some really need a cigarette. Would you provide cigarettes in vending machinea?

kevin_b_er 10y ago

> Some had already been irritated when “professional” managers had been hired over their teams with reportedly more stock than the early engineers had That right there is a huge warning sign that they're not valued well and that they never were.

hkmurakami 10y ago
That's every post series A VP hire.
mooreds 10y ago
Wait. I know all about having dunderheads hired above me, having gone through the dot com bubble and crash. But are you implying that no VP should ever be hired over the early engineers? I can imagine numerous situations where doing just that would provide value to the engineers and the company. And an experienced VP, even if expensive, can be a bargain if they've "done this before".

mcguire 10y ago

"It never ceases to amaze me how many startups make the mistake of killing off the free drinks." (One of the comments on the page.) But wait a minute. Killing off the free drinks is just the signpost. The change is primarily in the size and the culture of the company itself. Charging for sodas might be the first, but it isn't the biggest change that the company is going to, and going to have to, make as it grows. Does anyone really believe that IBM, Amazon, Facebook, or Google would still be their happy fun startup selves if they still gave away free sodas?

kylec 10y ago
I would be shocked if Amazon, Facebook, and Google don't still give away free sodas.
- Jach 10y ago
  Amazon, among several other infamous reasons to not work for them, does not provide free soda or snacks.
- davidw 10y ago
  Or perhaps in the case of Google, something a bit healthier and more expensive than sodas? Those things are pretty bad for you.
- serge2k 10y ago
  Amazon doesn't. Facebook and Google both give away free food, so I can't see why soda would be a problem. Microsoft has free soda and the food is fairly cheap.
  - mikestew 10y ago
    Microsoft has free soda and the food is fairly cheap. Eh? Could have changed since I was last there eleven years ago, but in the last four or five years of my tenure I rarely ate in the cafeterias because for less money I could get more and better food within a five minute walk. And I got to go for a walk at lunch. (So I guess I'm talking on the order of fifteen years ago. Never mind the old man in the corner mumbling to himself about how it was better, er I mean worse, back then.)

flinty 10y ago

Is this in response to the bloomberg article on how the new CFO over the past year has been cutting moonshots?

dpandey 10y ago

Small perks like free lunches, gym membership or a massage every month are huge in making employees happy. We're a seed funded company and provide free lunches to our employees. We also reimburse up to 100$ a month for fitness/gym memberships. Some of my friends working in large organizations don't get these perks, and point out that they're wasteful of a company that is cash flow negative and trying to conserve capital. What most people with such mindset don't realize is how valuable inspired people can be. For employees to be inspired, they must do work they find meaningful and they must be appreciated and challenged. But they also must realize the company genuinely cares about them. Then they want to give back to the company; they want to exceed expectations because they love how the company cares about them. Now you need to show care to employees on an everyday basis, but one amazing way to show it is with perks like these. 100$ a month for gym or 200$ a month for lunch per employee is not outrageous if you compare that with how much you pay them every month. It's almost miniscule. Also, in most startups at least, they're getting paid below market rate in exchange for equity etc. Not having to worry about lunch or gym everyday makes a huge difference psychologically. The one situation where you can justify cutting perks is when the company is going through a genuine crisis, cutting the perk is critical to get through, and you let everyone know this is temporary and it's just something we all must do to get through this crisis. Otherwise, instead of trying to cut soda out, the management needs to focus on growing revenue and profits and ask themselves why they're not succeeding there as much as they'd like to. Hiding behind a soda cut isn't going to fix the issue. PS: I used to worked at Salesforce where we got several days a year off just to go volunteer time at non-profits. You'd be amazed at how much employees love the company for allowing them to do things non-work related that they're passionate about just a few days a year while getting paid for it. It says that the company has a warm heart. The impact shows up in the company's relentless growth year after year. Same with companies like Costco. Showing care for employees has an outsized impact on the bottomline.

KON_Air 10y ago
It really sounds like something between modernified Fordism and in-setting cyberpunk horror story.
ChuckMcM 10y ago
I tend to agree with this perspective but I don't think anyone has managed to actually create an experiment to study it. (perhaps if two startups in the same space had diametrically opposed benefits you could use their market share or productivity as a comparison metric). There is also something tribal/instinctual about sharing food. Buying lunch two or three times a week for the team will bond them better paying them cash. And a well bonded team is a higher performance team. That you can measure with your sprint planning. The downside is that it is disproportionately impactful when you take food away. When Crawford Beverage (HR VP at Sun) discontinued the company beer bash (and it was just popcorn, chips, maybe some vegetables with ranch dressing and beer, not even a lot of food) it permanently scarred morale.

imagist 10y ago

> The most talented and senior engineers looked up from their desks and noticed the company was no longer the one they loved. This is well-worded. The problem for these execs wasn't that the company was no longer a good place for engineers. The problem was that the engineers noticed. Don't be the engineer who doesn't notice their job sucks until they start charging for soda. By that point you've been working for a terrible company for a long time.

pascalxus 10y ago

What? They quit the company because they no longer got free sodas? I'd rather have an extra 300$ of salary per year, than free cans of Sugar all year. And, if the best developers have so much bargaining power as to leave, just because of sodas, why aren't they leaving toxic work places like Amazon in droves? Other places are cutting cost in far more profound ways: laptops and computer equipment, etc.

anthony-james 10y ago
I think it's more of anticipation for the future. If a company cuts overhead for something big, say, a corporate holiday party from $100k to $80k, some may be frustrated, but it's probably because they recognize the waste in hosting at the Ritz instead of the Hilton. It doens't necessarily mean salaries, benefits, or other, smaller, things will be cut, but it's sending a message that the firm cares about fiscally sustainable operations. If a company cuts costs of the little things, all of a sudden everything is put on the table. Stock options, salary, benefits, perks, headcount. It sends the message that the company cares about operating today more efficiently than it cares about growing (because no company would stop investing in employees if it could still grow, because good employees make good products). Companies cut small costs because they believe that their product/market fit has reached the final destination and the only way to grow profits is by cutting. The best firms (and by extension, employees) realize that the best way to grow is always up.
gdulli 10y ago
> why aren't they leaving toxic work places like Amazon in droves? They are leaving Amazon. http://www.ibtimes.com/amazoncom-has-second-highest-employee-turnover-all-fortune-500-companies-1361257 http://www.ibtimes.com/amazoncom-has-second-highest-employee... The point here is that it wasn't the sodas that made them leave. The sodas were a tangible, visible thing that made them evaluate everything else, which also wasn't good.
zhemao 10y ago
Did you read to the end of the article? > The engineers focused on building product never noticed when the company had grown into something different than what they first joined. The sodas were just the wake-up call. As for why engineers aren't leaving Amazon in droves, Amazon actually has pretty high turnover. The average employment term for engineers is 18 months. So engineers are leaving, but there are more engineers replacing them. Newly graduated engineers join big name tech companies like Amazon, Google, and Facebook to boost their resumes before going on to do other things.

anthony-james 10y ago

As an accountant, I feel like employees are severely underpaid in highly-skilled markets (like tech, not accounting), and I think that companies don't actually capture the true cost of a single full time employee. Most see a salary, benefits, fringe costs (like hiring HR and finance teams), lunches, etc. Some of the better firms add in the cost of hiring employees with intangibles, like communication, poise, and professionalism, but the truly great see the largest potential cost - that they do better work at a competitor. If you're paying an engineer $100k to add 150k worth of value to your product, the true value of their work is $300k: $150k worth of value to you, and $150k worth of value that isn't added to your next closest competitor. It's the same reason football teams say "defense wins championships" - because Defense is the only position where you can simultaneously score points and stop your opponent from scoring. Offenses can only score. Now, that employee shouldn't be paid $300k because that's the true value for the organization, rather, they should be paid as close to the marginal benefit they directly apply to the organization - in this case, $150k. Doing so may be a breakeven point from a cash perspective, but a billion dollar company that breaks even is worth more than a lemonade stand making $10 profit. From an accounting perspective, this can be observed as employee expenses (temporary equity accounts) providing value to products (permanent asset). When the employee is terminated, the assets still remain, so for anyone with any equity stake in the firm, it is beneficial to pay as much as possible up to the point that the company a) doesn't run out of runway, b) retains talent to further grow the assets and c) doesn't grow competitor assets. The CFO that cut soda costs by $10k also boosted the equity of all the competitors that hired the disgruntled employees - and most likely by a value greater than $10k, and multiplied by each employee that left. Just my $.02 Edit: Cut soda costs by $10k total, not per employee

feral 10y ago
If you're paying an engineer $100k to add 150k worth of value to your product, the true value of their work is $300k: $150k worth of value to you, and $150k worth of value that isn't added to your next closest competitor. That model seems to assume: - every employee who leaves will go to close competitors - their work for that close competitor will be perfectly zero-sum to their work for your company - the next best replacement employee your competitor would otherwise hire would be worth 0 to them

deleted 10y ago

[deleted]

everyone 10y ago

The free soda n junk in startups is bullshit. I'd rather get paid a little more and spend that on what I choose (something healthy). Who would be enticed by that? What is enticing to me is the freedom to work how/where/when I want.

Fnoord 10y ago
Agreed. TANSTAAFL, and I guess it is the old left (as in everyone equal) vs right (free choice) debate. We get free bread for lunch. Cool, but I don't wanna eat bread. Coffee is free. Cool, but it is bad quality, my el cheapo espresso machine at home is even better. Plus I'll experience a massive down in the evening. Oh hey, not the employer's problem. I've never seen free soda anywhere, but the thing is: it is just a lot of sugar, with too little water. I won't drink that if I get paid for it. At least water is free, and that's important in the summer. I'm free to go grab a cup, and the walk is healthy, too. Then there's these parties 'for team spirit', with all kind of fried food. Cool. Guess who pays for that? Screw all this. Like you said; "I'd rather get paid a little bit more."
- aoeuasdf1 10y ago
  I agree with you - but there are two advantages to giving perks like food: No transaction costs. Not just the actual monetary cost of the transaction, but no need to employ people to man registers, no need to wait in line to pay. And more subtly, no need to argue with yourself about whether it's worth it to buy the item you are consuming. Secondly, these perks are bought in bulk and provided without having to pay income tax on them. So it's just cheaper than paying people more and having them buy the goods. That being said, I do wish there were more healthy options by default.
  - everyone 10y ago
    An additional point as to why I dont like this.. I'm busting my ass in the code mines making this amazing software thats making us all money. Then 'management' waste it on frivolities, like free junk food, booze, time wasting exercises, stuff that they like. It also means they may be unthinkingly following the silicon valley style 'startup' stereotype, which is actually almost depressingly ironic. Anyway, its not a big deal, but that stuff is a warning sign for me.

gdulli 10y ago

My company is just about to make a mistake like this. It's sad to know it's coming and watch it happen in slow motion.

desireco42 10y ago

This old, famous article from Steve Blank... not sure what to make of this? Did Google started to charge for it's meals or something?

pdimitar 10y ago

The thing that irks me about ALL of the places I ever worked at is that they prefer to shower you with benefits like [small partial] free dental, gym memberships, food stamps, and what not. It seems nobody ever stops to think "Hey, our employees are ADULTS, right? How about we just give them all these money as a flat paycheck increase and let them decide what to do with them?". I switched desires many times in my life. Sometimes I've been going regularly to dentists, other periods I've been going to the gym, and then I have been eating twice a day for months -- and half a year later I wake up to the fact that it's much healthier to eat 5-6 times a day (but food stamps don't cover for more than 1 meal), and then a year later I figure I simply want to watch most of the modern sci-fi TV shows in several huge binge sessions. Examples abound from mine and many others' experience. These organizational policies are pandering to the common lowest denominator. THIS IS ABSOLUTELY FINE. The part that pissed me off in many of my office jobs in the past is that the managers fail to recognize the people who don't want their free things and would prefer another format of loyalty bonuses. The biggest failure of the management in organizations like those in the OP is the fact that these people are under the illusion that they can shoehorn their people into strict processes during one big effort session, and then never do management ever again. This never works.