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To me, a business decision is always based on _relative_ risk to reward ratio. If you're a startup hiring employee number 3 vs Google hiring employee number 739

To me, a business decision is always based on _relative_ risk to reward ratio. If you're a startup hiring employee number 3 vs Google hiring employee number 739813, your risk profile is completely different, but the absolute dollar investment in one employee is about the same. In that scenario hiring an employee number 3 could be a huge gamble in a way that hiring employee number 739813 could never be. But lets leave out the technicalities. Call it a gamble, stupid investment, whatever. Yes, I agree a billion is a lot of money. Apple still needs to have this project, in order to stay relevant to competitors and current/potential employees. Even if it does fail, the side effects of having this project mainly to attract talented engineers and stay relevant make it worth the investment.

AnthonyMouse 8y ago
> To me, a business decision is always based on _relative_ risk to reward ratio. If you're a startup hiring employee number 3 vs Google hiring employee number 739813, your risk profile is completely different, but the absolute dollar investment in one employee is about the same. In that scenario hiring an employee number 3 could be a huge gamble in a way that hiring employee number 739813 could never be. Sure, but that's mostly because a startup has a very high risk profile, because success or failure is existential. In nearly all other cases, even for smallish companies, the risk is lower, even for employee number 3. If you're a small doctor's office and you hire a crappy receptionist, you'll have a bad time but you'll survive. If your startup hires a bad marketing person and some competitor popularizes their tech before you do, game over. And once we're not talking about existential risk, we're talking about dollar risk. Which doesn't depend that much on who you are. If it costs ten billion dollars to have a 10% chance to make fifty billion dollars, is it worth it? > Apple still needs to have this project, in order to stay relevant to competitors and current/potential employees. Even if it does fail, the side effects of having this project mainly to attract talented engineers and stay relevant make it worth the investment. But it's a secret. How is it helping them attract anyone if nobody knows about it? They may even have something actually interesting but we won't know until they reveal it (or it leaks), and in the meantime it sounds like pretty boring and expensive follow-the-leader behavior. And if it does fail they won't even tell anyone about it.
- gbear605 8y ago
  One difference is that the amount of starting capital matters. Say someone tells you that you can spend a million dollars for a 1% chance at a trillion dollars. That makes perfect sense for Apple, but I’d question your judgement if you throw your life savings into that gamble. That’s because the value of a marginal dollar is worth a lot less when you already have a lot of money. To see another example, consider the value that Bill Gates gets from having an extra $100,000 (essentially none) versus a homeless person (life changing).
  - AnthonyMouse 8y ago
    > One difference is that the amount of starting capital matters. Well, yes and no. If you're incommunicado in some kind of locked room with a timebombed offer, sure, if you can't afford to lose the money you say no. But if someone actually offered you a 1% chance at a trillion dollars for a million dollars, you take the offer and then immediately sell the company that owns the contract for ten billion dollars and pocket the ten billion dollars. Or sell half of it for five billion dollars and keep the other half.
- mandeepj 8y ago
  > But it's a secret. How is it helping them attract anyone if nobody knows about it? They don't need to announce it publicly. Only to intended recipients.

AnthonyMouse 8y ago

> To me, a business decision is always based on _relative_ risk to reward ratio. If you're a startup hiring employee number 3 vs Google hiring employee number 739813, your risk profile is completely different, but the absolute dollar investment in one employee is about the same. In that scenario hiring an employee number 3 could be a huge gamble in a way that hiring employee number 739813 could never be. Sure, but that's mostly because a startup has a very high risk profile, because success or failure is existential. In nearly all other cases, even for smallish companies, the risk is lower, even for employee number 3. If you're a small doctor's office and you hire a crappy receptionist, you'll have a bad time but you'll survive. If your startup hires a bad marketing person and some competitor popularizes their tech before you do, game over. And once we're not talking about existential risk, we're talking about dollar risk. Which doesn't depend that much on who you are. If it costs ten billion dollars to have a 10% chance to make fifty billion dollars, is it worth it? > Apple still needs to have this project, in order to stay relevant to competitors and current/potential employees. Even if it does fail, the side effects of having this project mainly to attract talented engineers and stay relevant make it worth the investment. But it's a secret. How is it helping them attract anyone if nobody knows about it? They may even have something actually interesting but we won't know until they reveal it (or it leaks), and in the meantime it sounds like pretty boring and expensive follow-the-leader behavior. And if it does fail they won't even tell anyone about it.

gbear605 8y ago
One difference is that the amount of starting capital matters. Say someone tells you that you can spend a million dollars for a 1% chance at a trillion dollars. That makes perfect sense for Apple, but I’d question your judgement if you throw your life savings into that gamble. That’s because the value of a marginal dollar is worth a lot less when you already have a lot of money. To see another example, consider the value that Bill Gates gets from having an extra $100,000 (essentially none) versus a homeless person (life changing).
- AnthonyMouse 8y ago
  > One difference is that the amount of starting capital matters. Well, yes and no. If you're incommunicado in some kind of locked room with a timebombed offer, sure, if you can't afford to lose the money you say no. But if someone actually offered you a 1% chance at a trillion dollars for a million dollars, you take the offer and then immediately sell the company that owns the contract for ten billion dollars and pocket the ten billion dollars. Or sell half of it for five billion dollars and keep the other half.
mandeepj 8y ago
> But it's a secret. How is it helping them attract anyone if nobody knows about it? They don't need to announce it publicly. Only to intended recipients.