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I think in a broad sense you can consider shares (especially within the scope of index funds) "money supply." A company can issue shares and use them to pay peo

I think in a broad sense you can consider shares (especially within the scope of index funds) "money supply." A company can issue shares and use them to pay people or buy companies with. That's money. I think that the later points you make about inefficiencies are great, and especially apt/worrying in the large cap tech world. FB & Twitter are a prime example. They increased headcount and costs by 10X-100X, after becoming massive platforms scaled to serve everyone in the world. The product twitter and Facebook serve is still the same product they served with a 10th of the employees. Sure, the ad-tech grew, but that cannot plausibly obsorb thousands of engineers. What mostly grew is various forms of administration. If Toyota got swallowed by the earth tomorrow, the world's ability to produce cars takes a real hit. Real investment will have to be made to replace this capacity. If Facebook or Twitter disappeared, a handful of resourceful people would have a clone up in days. That's a frightening level of inefficiency.

pushtheenvelope 8y ago
> FB & Twitter are a prime example. They increased headcount and costs by 10X-100X, after becoming massive platforms scaled to serve everyone in the world. The product twitter and Facebook serve is still the same product they served with a 10th of the employees. I think you're vastly underestimating the complexity of running a product like Facebook or Twitter. At scale, every minor problem gets magnified in both product-terms, and raw technical-terms. This requires investment of people and resources. As a simple example, consider that Facebook has to build, and evolve its own php-esque language runtime. This has properties tuned to the specific traffic patterns of Facebook, thereby saving many millions of dollars in server costs. So, no, I vehemently disagree that a handful of resourceful people can clone Facebook, beyond the most obvious high-level features that you may be familiar with from your personal usage. Similar arguments will apply to Twitter.
- dalbasal 8y ago
  If you cloned every single detail, I suppose you'd have an exact clone, including all the people. But cloning the main features is cloning the service, from a user perspective. I think you're vastly underestimating how much scale they already had, before all these people. When FB IPOed (just 6 years ago) FB were operatating with 1/10 the current resources. ATT, they were already generating revenue and private investors were falling overthemselves to invest.. so it's not like times were leane then. Since, revenue, expenses & headcount has grown 10X. FB is still basically FB. If their ad business had capped off at $8bn instead of $80bn, my guess is that almost nothing a user notices would be different. It's not proveable. You can always counter that FB does 10X more than they did 6 years ago. We can't count the number of cars leaving a factory.
pmart123 8y ago
So for a counter factual example, what if you could legally download all of Renaissance Technologies source code? How much would your company be worth? You still need to hire a team, implement the hardware, understand the nuances, and also build up datasets of trade history, etc. What once in theory sounds easy, might not be as simple as you think. Facebook and Twitter have the users, old content and built social networks. They have data on user patterns, relationships with advertisers, etc. I don’t think it would be as simple as you think.
- dalbasal 8y ago
  I didn't mean you can (or should) clone fb, get the users, etc. thought experiment.

pushtheenvelope 8y ago

> FB & Twitter are a prime example. They increased headcount and costs by 10X-100X, after becoming massive platforms scaled to serve everyone in the world. The product twitter and Facebook serve is still the same product they served with a 10th of the employees. I think you're vastly underestimating the complexity of running a product like Facebook or Twitter. At scale, every minor problem gets magnified in both product-terms, and raw technical-terms. This requires investment of people and resources. As a simple example, consider that Facebook has to build, and evolve its own php-esque language runtime. This has properties tuned to the specific traffic patterns of Facebook, thereby saving many millions of dollars in server costs. So, no, I vehemently disagree that a handful of resourceful people can clone Facebook, beyond the most obvious high-level features that you may be familiar with from your personal usage. Similar arguments will apply to Twitter.

dalbasal 8y ago
If you cloned every single detail, I suppose you'd have an exact clone, including all the people. But cloning the main features is cloning the service, from a user perspective. I think you're vastly underestimating how much scale they already had, before all these people. When FB IPOed (just 6 years ago) FB were operatating with 1/10 the current resources. ATT, they were already generating revenue and private investors were falling overthemselves to invest.. so it's not like times were leane then. Since, revenue, expenses & headcount has grown 10X. FB is still basically FB. If their ad business had capped off at $8bn instead of $80bn, my guess is that almost nothing a user notices would be different. It's not proveable. You can always counter that FB does 10X more than they did 6 years ago. We can't count the number of cars leaving a factory.

pmart123 8y ago

So for a counter factual example, what if you could legally download all of Renaissance Technologies source code? How much would your company be worth? You still need to hire a team, implement the hardware, understand the nuances, and also build up datasets of trade history, etc. What once in theory sounds easy, might not be as simple as you think. Facebook and Twitter have the users, old content and built social networks. They have data on user patterns, relationships with advertisers, etc. I don’t think it would be as simple as you think.

dalbasal 8y ago
I didn't mean you can (or should) clone fb, get the users, etc. thought experiment.