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> they're there to make more money than they cost. This is the key most people ignore. If each employee generates revenue greater than their cost of employment

> they're there to make more money than they cost. This is the key most people ignore. If each employee generates revenue greater than their cost of employment, why not keep them around? The goal isn't keeping the lights on, its making money.

kube-system 6y ago
Yes, I feel like developers tend to evaluate tech businesses from the perspective of the tech that they generate, since that is the goal of a developer. It's sometimes hard to remember that making tech is simply the means to an end.
- notyourwork 6y ago
  Takes a bit of perspective shift to realize tech is a means to end and not the end itself.
  - jiofih 6y ago
    That shift usually happens around year 1-2 for every software developer.
    - mavelikara 6y ago
      IME, you are over estimating how quickly this happens. For me, I was well past my 10th year into the profession when this realization struck. And now, as a hiring manager, I frequently interview senior developers who are not able to explain the business goals of their software. I consider it an important part of my job to coach engineers in my org to understand the business context of their work - a benefit I got only well into my career.
      - 0xy 6y ago
        Totally anecdotal, but the second I embraced business objectives and commercial thinking is when my career exploded. 3 jobs in 2 years, and my income grew over 110% in that timeframe. A lot of my colleagues seem to get stuck in a position of being very tech focused where JIRA tickets go in, and code comes out (and not much else goes on). I highly recommend other developers try to sharpen their business and commercial skills, even if you don't want to be a leader. You'll be able to sell your skills and influence technical decisions way easier.
      - ksec 6y ago
        Agree. I think the general shift in perspective and how the world works ( with respect to money, business, economy and people ) happens somewhere around 8 - 12 years into the society. So for those who joined the Work force or has some work experience earlier in age that tends to happen sooner / younger.
three_seagrass 6y ago
It's not just about profitability though. I'm a bit rusty with my corporate finance, but internal rate of return (IRR) and weighted average cost of capital (WACC) can dictate that even if an employee is making more than what they cost, the money could still be better allocated elsewhere.
- eigenvalue 6y ago
  The metric that tends to matter in this is ROIC, but since software/internet companies tend to be pretty "capital light", they generally already have a very high ROIC. Unless the company can deploy that money in new growth projects that they aren't already going after, or in accretive acquisitions (hard to do when tech valuations are so high), it probably makes sense to do what they are doing.
- notyourwork 6y ago
  Does "allocated elsewhere" imply not at the company or performing another task? Those are quite different.
- jldugger 6y ago
  Sure, it's a simplification, but the point kind of stands -- if you have a net positive outcome after adjust for cost of capital, you should seek that capital out to make it happen. Or maybe decrease a dividend or buyback program.
supernova87a 6y ago
To pull in a side topic on this very idea -- it's crazy that Congress chooses to defund and target the IRS, their own tool for revenue generation. Can you imagine how much money each IRS employee can bring in? I know there's stealth doctrinal reasons for engaging in the shenanigans, but at a practical level, cmon, we're shooting ourselves in the foot.
- gowld 6y ago
  Congresspeople aren't paid a commission on tax revenue. The have no particular incentive to raise funds via text enforcement vs raising rates vs raising debt.
- markkanof 6y ago
  But it's not like the IRS is having sales people cold call Americans and convince them to send more money. Even if you take the most charitable interpretation of what taxes are (ie. you think they are legitimate and necessary at their current level), it still makes most sense to automate as much of the IRS process as possible. Otherwise those IRS employees are eating up tax resources that could be applied to other things.
  - supernova87a 6y ago
    You may not know there is a huge job the IRS needs people to do: audits and reviews, which are not automated. And take cases to court. Every IRS employee who is available to review tax filings can probably bring in multiple (probably dozens of) millions of $ of incorrectly or improperly filed taxes. Tell me that's not worth paying a person's annual salary for?

kube-system 6y ago

Yes, I feel like developers tend to evaluate tech businesses from the perspective of the tech that they generate, since that is the goal of a developer. It's sometimes hard to remember that making tech is simply the means to an end.

notyourwork 6y ago
Takes a bit of perspective shift to realize tech is a means to end and not the end itself.
- jiofih 6y ago
  That shift usually happens around year 1-2 for every software developer.
  - mavelikara 6y ago
    IME, you are over estimating how quickly this happens. For me, I was well past my 10th year into the profession when this realization struck. And now, as a hiring manager, I frequently interview senior developers who are not able to explain the business goals of their software. I consider it an important part of my job to coach engineers in my org to understand the business context of their work - a benefit I got only well into my career.
    - 0xy 6y ago
      Totally anecdotal, but the second I embraced business objectives and commercial thinking is when my career exploded. 3 jobs in 2 years, and my income grew over 110% in that timeframe. A lot of my colleagues seem to get stuck in a position of being very tech focused where JIRA tickets go in, and code comes out (and not much else goes on). I highly recommend other developers try to sharpen their business and commercial skills, even if you don't want to be a leader. You'll be able to sell your skills and influence technical decisions way easier.
    - ksec 6y ago
      Agree. I think the general shift in perspective and how the world works ( with respect to money, business, economy and people ) happens somewhere around 8 - 12 years into the society. So for those who joined the Work force or has some work experience earlier in age that tends to happen sooner / younger.

three_seagrass 6y ago

It's not just about profitability though. I'm a bit rusty with my corporate finance, but internal rate of return (IRR) and weighted average cost of capital (WACC) can dictate that even if an employee is making more than what they cost, the money could still be better allocated elsewhere.

eigenvalue 6y ago
The metric that tends to matter in this is ROIC, but since software/internet companies tend to be pretty "capital light", they generally already have a very high ROIC. Unless the company can deploy that money in new growth projects that they aren't already going after, or in accretive acquisitions (hard to do when tech valuations are so high), it probably makes sense to do what they are doing.
notyourwork 6y ago
Does "allocated elsewhere" imply not at the company or performing another task? Those are quite different.
jldugger 6y ago
Sure, it's a simplification, but the point kind of stands -- if you have a net positive outcome after adjust for cost of capital, you should seek that capital out to make it happen. Or maybe decrease a dividend or buyback program.

supernova87a 6y ago

To pull in a side topic on this very idea -- it's crazy that Congress chooses to defund and target the IRS, their own tool for revenue generation. Can you imagine how much money each IRS employee can bring in? I know there's stealth doctrinal reasons for engaging in the shenanigans, but at a practical level, cmon, we're shooting ourselves in the foot.

gowld 6y ago
Congresspeople aren't paid a commission on tax revenue. The have no particular incentive to raise funds via text enforcement vs raising rates vs raising debt.
markkanof 6y ago
But it's not like the IRS is having sales people cold call Americans and convince them to send more money. Even if you take the most charitable interpretation of what taxes are (ie. you think they are legitimate and necessary at their current level), it still makes most sense to automate as much of the IRS process as possible. Otherwise those IRS employees are eating up tax resources that could be applied to other things.
- supernova87a 6y ago
  You may not know there is a huge job the IRS needs people to do: audits and reviews, which are not automated. And take cases to court. Every IRS employee who is available to review tax filings can probably bring in multiple (probably dozens of) millions of $ of incorrectly or improperly filed taxes. Tell me that's not worth paying a person's annual salary for?