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It was the same way with Digg. Hundreds of employees to do what exactly? In hindsight, maybe not shocking it died. Reddit is doing the same, ~300 employees to r

It was the same way with Digg. Hundreds of employees to do what exactly? In hindsight, maybe not shocking it died. Reddit is doing the same, ~300 employees to run something that a team of 30 could (of course, not all are engineers). It's crazy. Reddit plans to expand to 300 employees by the end of the year from its current 230. That's already up from the 140 the company had at the beginning of 2017. Huffman declined to share revenue numbers, and the company is not profitable. https://www.bizjournals.com/bizwomen/news/latest-news/2017/08/reddit-raises-200m-for-new-1-8b-valuation.html https://www.bizjournals.com/bizwomen/news/latest-news/2017/0... Don't know how accurate this is, but Twitter is at 3500 employees now, down from 3900. https://www.statista.com/statistics/272140/employees-of-twitter/ https://www.statista.com/statistics/272140/employees-of-twit... There's something fundamentally wrong with the way the industry builds products.

debacle 9y ago
It's the valuation trap. If twitter was satisfied with a valuation 2-3 orders of magnitude lower than what it is, it would be highly profitable right now.
- bluGill 9y ago
  The question is CAN twitter be satisfied. I'm not talking if the investors, ego, or all those others will be satisfied, can it survive at all? The question is how many people are actually needed to keep the lights on. One person can read the latest CERT notices every day and decide "we need to upgrade our servers before we are hacked", but from there the upgrade can get hard: how many people are needed to to stage and test the upgrade. How many people are needed to keep the servers running? How many people are needed to ensure that twitter doesn't become a has been unable to keep up with their competition (who presumably is adding new features all the time)? The above is a complex question. I don't know the answers, so while I lean to agree with those thinking twitter should cut people until they are profitable I can never be entirely sure. Even if twitter took my advice and it worked out I can't be entirely sure their current path (too many people) wouldn't be better in the long term. Or alternatively if they continue on the current path I cannot be sure if cutting people would have been better.
  - charlesdm 9y ago
    The answer is probably: a lot less. Let's be honest, with the exception of Google, there are very few technology companies (not consulting companies) in the world that actually need 10.000+ employees.
ojbyrne 9y ago
It's easy to say that from the outside, especially if you cherry pick unsuccessful companies. Google has 72k employees, Facebook has 17k. What exactly do _they_ all do?
- robotresearcher 9y ago
  Taxes aren't going to avoid themselves.
  - charlesdm 9y ago
    Multinationals generally retain a top tax law firm for that, not an in house tax lawyer.
    - Vindicis 9y ago
      Smaller companies will. Multinationals generally have in-house tax specialists to deal with all of that. Case and point: General Electric. Assuming by multinational you're talking about Fortune 500 and not companies operating in more than one country.
- spyspy 9y ago
  How long was it before those companies broke even though?
  - tqkxzugoaupvwqr 9y ago
    Facebook burnt through $700M if I recall correctly. Back then this was unheard of. Though, most of it was to support their explosive organic growth while ad revenue was catching up. Google made money almost from the start I think. Reddit has been losing money since its inception.
    - gogopuppygogo 9y ago
      Facebook paved the way for this second tech boom from my perspective. VC's suddenly had FOMO again when it came to user growth over profit.
s73ver_ 9y ago
I guess it'd be more helpful to see a breakdown by employee type/duty. Stuff like Reddit/Twitter would be considered to be something that needs to be up 24/7 (by their users/investors/etc). That means either shift work, or a lot more people so you can rotate the on-call duties. When you're a fresh, new company, you can get away with having one or two people do that in perpetuity, but after you get VC funding or have been around for a while, those people are going to expect you to hire on more help for them so they don't have to be on call all the time.
- amygdyl 9y ago
  I think a classic reason for ever expanding head count, and in ZIRP era economy, valuations, is because management tries to end run failures of immediate objectives and keep trying more elaborate end runs. Yes, UberCab will be a fine multi city service if they have poured such subsidy into their operations, that every last competitor is bankrupt.
ryandrake 9y ago
Whenever you start asking "Why does company X need all these people, what do they do?" Think about your time playing Kerbal Space Program and learning how the rocket equation works. In order to get a heavier rocket into space, you need more fuel, which itself weighs more, so you need even more fuel to launch all that extra fuel, which itself weighs more, etc. The same kind of thing is true with companies. In order to hire X more employees who "do actual stuff" you need to hire X * Y% more other employees to support and manage those do-ers, which, themselves need X * Y% * Z% more other other employees to support and manage them. Suddenly you have Digg with 300 employees. That's kind of how it happens. I don't think there is such a thing as a medium-to-large company with just "do-ers" sitting there doing things without support staff like project managers and HR personnel (not to say these people don't do things, just not in the sense of directly making products, which is the root of the "what do all these employees do?" question)
amygdyl 9y ago
I have to just say that I can't think of anything else except that advertising sales just does not scale. You may point to Google. But they are what in UK financial regulation speak, is called a Systematic Internaliser. They operate a two way market without substantial open interest not provided except internally from client order flows executed according to their own instruction interpretations.
nylonstrung 9y ago
In the case of Reddit they are doing a massive redesign though and were building out a mobile app

debacle 9y ago

It's the valuation trap. If twitter was satisfied with a valuation 2-3 orders of magnitude lower than what it is, it would be highly profitable right now.

bluGill 9y ago
The question is CAN twitter be satisfied. I'm not talking if the investors, ego, or all those others will be satisfied, can it survive at all? The question is how many people are actually needed to keep the lights on. One person can read the latest CERT notices every day and decide "we need to upgrade our servers before we are hacked", but from there the upgrade can get hard: how many people are needed to to stage and test the upgrade. How many people are needed to keep the servers running? How many people are needed to ensure that twitter doesn't become a has been unable to keep up with their competition (who presumably is adding new features all the time)? The above is a complex question. I don't know the answers, so while I lean to agree with those thinking twitter should cut people until they are profitable I can never be entirely sure. Even if twitter took my advice and it worked out I can't be entirely sure their current path (too many people) wouldn't be better in the long term. Or alternatively if they continue on the current path I cannot be sure if cutting people would have been better.
- charlesdm 9y ago
  The answer is probably: a lot less. Let's be honest, with the exception of Google, there are very few technology companies (not consulting companies) in the world that actually need 10.000+ employees.

ojbyrne 9y ago

It's easy to say that from the outside, especially if you cherry pick unsuccessful companies. Google has 72k employees, Facebook has 17k. What exactly do _they_ all do?

robotresearcher 9y ago
Taxes aren't going to avoid themselves.
- charlesdm 9y ago
  Multinationals generally retain a top tax law firm for that, not an in house tax lawyer.
  - Vindicis 9y ago
    Smaller companies will. Multinationals generally have in-house tax specialists to deal with all of that. Case and point: General Electric. Assuming by multinational you're talking about Fortune 500 and not companies operating in more than one country.
spyspy 9y ago
How long was it before those companies broke even though?
- tqkxzugoaupvwqr 9y ago
  Facebook burnt through $700M if I recall correctly. Back then this was unheard of. Though, most of it was to support their explosive organic growth while ad revenue was catching up. Google made money almost from the start I think. Reddit has been losing money since its inception.
  - gogopuppygogo 9y ago
    Facebook paved the way for this second tech boom from my perspective. VC's suddenly had FOMO again when it came to user growth over profit.

s73ver_ 9y ago

I guess it'd be more helpful to see a breakdown by employee type/duty. Stuff like Reddit/Twitter would be considered to be something that needs to be up 24/7 (by their users/investors/etc). That means either shift work, or a lot more people so you can rotate the on-call duties. When you're a fresh, new company, you can get away with having one or two people do that in perpetuity, but after you get VC funding or have been around for a while, those people are going to expect you to hire on more help for them so they don't have to be on call all the time.

amygdyl 9y ago
I think a classic reason for ever expanding head count, and in ZIRP era economy, valuations, is because management tries to end run failures of immediate objectives and keep trying more elaborate end runs. Yes, UberCab will be a fine multi city service if they have poured such subsidy into their operations, that every last competitor is bankrupt.

ryandrake 9y ago

Whenever you start asking "Why does company X need all these people, what do they do?" Think about your time playing Kerbal Space Program and learning how the rocket equation works. In order to get a heavier rocket into space, you need more fuel, which itself weighs more, so you need even more fuel to launch all that extra fuel, which itself weighs more, etc. The same kind of thing is true with companies. In order to hire X more employees who "do actual stuff" you need to hire X * Y% more other employees to support and manage those do-ers, which, themselves need X * Y% * Z% more other other employees to support and manage them. Suddenly you have Digg with 300 employees. That's kind of how it happens. I don't think there is such a thing as a medium-to-large company with just "do-ers" sitting there doing things without support staff like project managers and HR personnel (not to say these people don't do things, just not in the sense of directly making products, which is the root of the "what do all these employees do?" question)

amygdyl 9y ago

I have to just say that I can't think of anything else except that advertising sales just does not scale. You may point to Google. But they are what in UK financial regulation speak, is called a Systematic Internaliser. They operate a two way market without substantial open interest not provided except internally from client order flows executed according to their own instruction interpretations.

nylonstrung 9y ago

In the case of Reddit they are doing a massive redesign though and were building out a mobile app