7 ms·

‘A Perfect Positive Storm’: Bonkers Dollars for Big Tech

28 points by edward 6y ago

supernova87a 6y ago
First of all, if Twitter executives were compensated on whether these Twitter threads are visually easy to read, I would hope they all get fired with negative bonuses each year. Second, and more to the point, people in tech aren't getting rich "because tech is evil" or some emotionally charged political rallying cry like that. Tech people are getting rich because every single one of us is willing to part with some of our money to pay them to produce things we can't resist consuming! And these companies are operating totally rationally according to the rules we give them (and are / are not willing to change as a society). It's like yelling at realtors getting rich when you're the one buying a house. Or cursing at the traffic jam you're sitting in. Or finding out that your minor recreational drug habit is causing a refugee crisis. There is so much money built up in wealth around the world, and tech has found a way to tap into it. Now, that raises other fundamental problems as we all know. But as long as we continue demanding these services, are you surprised that someone is making money from it? Or just unhappy it's not you and me?
- paulpauper 6y ago
  ppl love hotdogs. no one getting 7 figure making them.
  - standardUser 6y ago
    I am sure there are plenty of executives at Tyson Foods pulling in 7 figure incomes, to name just one multinational that makes hot dogs.
  - supernova87a 6y ago
    That's because everyone can make their own hotdogs or eat something else if they want, and there's little barrier to your local deli getting into the hotdog business if they wanted to. Google search, not so much.
- jeffreyrogers 6y ago
  They are getting rich because of their exposure to the financial markets and because tech is currently an industry that lots of capital is flowing into. It has less to do with what consumers are willing to spend money on than it does on that. If it were just about what people want to spend money on then people in agriculture would be getting rich too.
  - thrill 6y ago
    Investment flows into the the tech where there are expectations of consumer interest.
    - Ericson2314 6y ago
      It's been little but "expectations" and Ponzie schemes for a decade. What do you expect next?
  - Ericson2314 6y ago
    Yeah the shocking thing about tech is how little revenue there is relative to investments. GP is exactly wrong.
    - asdfasgasdgasdg 6y ago
      Maybe in startups. The companies that are generating these vast amounts of wealth are large tech cos like Apple, Google, Facebook, Microsoft, Oracle, Netflix, etc. which all are making absolute craptons of profit over the medium term.
      - Ericson2314 6y ago
        Right. The thing we saw before was expectation of the latter influencing expectations of the former, but that might be finally starting to change.
  - paulpauper 6y ago
    a good tech product, especially in consumer and info tech, generates high profit margins and reliable recurring revenue protected by intellectual property , network effect,s and high intellectual barriers to entry. Other industries and sectors have lower margins and low barriers. This creates an incentive to spend a lot on capital, such as human capital, to produce such tech products.
- pydry 6y ago
  >But as long as we continue demanding these services Tech money seems to be made more via gatekeeping than providing a service. A friendly guy called Raul drives the taxi and provides the actual service. Uber puts itself between me and him. Uber doesn't make money if there are lots of people willing to be the go-between between me and Raul. Uber RAKES it in if they're one of two.
  - sagarm 6y ago
    Did you use taxis before Lyft/Uber? They clearly improve the customer experience.
    - pydry 6y ago
      I did, yeah. They drove down the cost more than they improved the experience. It's neat not having to dig around for cash and being able to see your driver on your phone arriving but it's not game changing. The real innovation was using a tsunami of cheap financing to engage in a predatory pricing war to gain oligopoly status and opening up being a taxi driver to anyone with a car. This was basically exploitation of wealth inequality. When I visited Buenos Aires in 2011 I was shocked that you could easily send somebody on a scooter to get you a starbucks and people regularly did. That "innovation" seems significantly less shocking these days. The west caught up.
      - jimbob45 6y ago
        Yep, this is the right read. Uber exploited under-regulation in gig economy jobs and passed (part of) the savings onto users.
      - xiphias2 6y ago
        ,, opening up being a taxi driver to anyone with a car'' That's what customers want. Taxis were always too expensive for normal people to use. In the past they needed to know the routes to any place inside a city, but since we have GPS navigation, now that knowledge is much less useful. Nowdays I care more about the car being modern than the knowledge of the driver.
bdamm 6y ago
They understand it perfectly when solar panels appear on your roof, a Tesla appears in your driveway, and vacations appear on your docket.
- standardUser 6y ago
  Ah yes the luxurious trappings of... a slightly-above-middle-class family?
  - witty_username 6y ago
    From https://www.evunite.com/blog/tesla-owner-demographics/ https://www.evunite.com/blog/tesla-owner-demographics/ : > Based on data pulled from 2,650 Tesla owners, the average household income of a Tesla Model X owner is $143,177 per year. > The average household income of a Tesla Model S owner is $153,313 per year. > This compares to the United States national medium household income of $78,500. 143k is about the 85th percentile ( https://en.wikipedia.org/wiki/Household_income_in_the_United_States#Distribution_of_household_income https://en.wikipedia.org/wiki/Household_income_in_the_United... ) So, this is at least upper middle class.
    - deleted 6y ago
      [deleted]
    - wskinner 6y ago
      Your census data is 7 years out of date. Has anything changed since then?
    - tayo42 6y ago
      Idk if the lifestyle is really that special. I think US income is just heavily weighted towards the bottom. Middle class is disappearing as wages stay low for most people. Tech isn't rich, just comparatively. Tech salaries are what almost Americans should be paid.
      - failwhaleshark 6y ago
sombremesa 6y ago
How rich people are getting, or how many people are getting "rich"? If you go for the former you should take an average, and it's not going to be impressive. If you go for the latter it'll be clear you're focused on a small minority, so it's not going to be impressive. So you have to go for something ambiguous and nebulous to impress people. No wonder you have a hard time "explaining" it!
- deleted 6y ago
  [deleted]
notacoward 6y ago
Wait until they find out how rich people in finance are getting. And, just like in tech, I don't mean the very tippy-top. I mean people who are barely above the equivalent of line workers, pulling in even more than their college roommates make in tech. But that's old news, and not NYT's sworn enemies, so I guess it's not as interesting to them.
- mikeyouse 6y ago
  There are roughly ~0 people in finance making a quarter million dollars per year right out of school, and there are tens of thousands of people in tech, probably hundreds of thousands. I know people in non-engineering, non-sales roles (e.g. recruiting and HR) at large tech cos buying 3rd houses in the Bay Area because their RSUs have appreciated so much so they're diversifying. It's absolutely insane how much wealth is being generated by the stock price run-up.
  - hesarenu 6y ago
    quarter million dollars per year right out of school - really?
    - jeffreyrogers 6y ago
      I heard of that happening when I graduated, which was in 2016, so I would not be at all shocked if it's more common now.
    - kaesar14 6y ago
      Look at a new grad compensation thread on r/cscareerquestions if you don't believe it.
    - mikeyouse 6y ago
      In total comp - yeah. It's insane. That's what the OP twitter post is talking about. If we see a stock market crash, a lot of that will evaporate, but there is a really large cash component and RSUs are buoying everything to really high levels right now. Just a new grad thread from Reddit: https://www.reddit.com/r/cscareerquestions/comments/m635u7/official_salary_sharing_thread_for_new_grads/gr3koj5/ https://www.reddit.com/r/cscareerquestions/comments/m635u7/o... Anecdotally, my friend who just closed on their 3rd house runs engineering recruiting for a large public Bay Area company (and used to run their new grad hiring) so they've told me specifically what that company pays for grads of their target schools which they've obviously honed based on competing offers from other tech companies.
cowgoesmoo 6y ago
lol Kevin Roose is a clown "tech journalist" that writes exclusively bad faith hit pieces on tech companies. He and his "tech journalist" friends at NYT have no clue what is actually happening in tech. His only goal is to get people riled up and angry at tech companies.
- comodore_ 6y ago
  He's the spearhead of the NYT pro censorship by tech wing. He's bad faith activist disguised as a journalist.
- paulpauper 6y ago
  look how little engagement his tweets get. Big media with their billions of dollars cannot match even no-name accounts.
- kaesar14 6y ago
  What's wrong with this piece in particular?
  - cowgoesmoo 6y ago
    The meat of the article is essentially saying "big tech got more customers because everyone moved online during the pandemic." Which is fine I guess, if a bit shallow and obvious. The last paragraph though, shows NYT's typical anti-tech bias. > Big Tech is emerging from the pandemic lean, mean and ready for a U.S. economy expected to roar back to life in 2021. Meanwhile, there are still long lines at food banks. Some American workers who lost their jobs last year may never get them back. Housing advocates are worried that millions of people will be evicted from their homes. And being Big Tech is an invitation for everyone to hate you — but you do have towering piles of money. They're trying so hard here to link "Big Tech"'s growth with pandemic-induced unemployment and housing crisis. What they say here is true in isolation. Big tech grew. There is unemployment and houses are getting pricier. But there's no evidence, in the article or otherwise, that these are linked whatsoever.
    - 6y ago
neogodless 6y ago
I see a Tweet with one reply. Is this a discussion of the NYTimes.com article[0]? [0] https://www.nytimes.com/2021/04/29/technology/big-tech-pandemic-economy.html https://www.nytimes.com/2021/04/29/technology/big-tech-pande...
barrenko 6y ago
Tech is an amplifier. Everything is at least volume x 20. And that includes risk as well. No one seems to want that part. No one wants burnout.
stunt 6y ago
What does tech people mean today? Farmers are richer where I live and I've been in tech for my entire life. And those farmers do use a lot of tech these day. Does it make them techies with these standard or not? Are we talking about software developers or entrepreneurs that happen to be using tech or have tech background? I'm definitely well above average, but I think there is an illusion about software engineers being rich. They are better than many other fields, but definitely not on the rich side. Go to LA and ask rich people what they do. I'm sure you will find a few "tech" entrepreneurs but you will be surprised how much people make in other professions.
failwhaleshark 6y ago
K-shaped recovery. There's a ubiquitous economic bifurcation that isn't obvious to the middle- and lower-classes. Want to know what economic inequality looks like? Well, there you go.

28 points by edward 6y ago

First of all, if Twitter executives were compensated on whether these Twitter threads are visually easy to read, I would hope they all get fired with negative bonuses each year. Second, and more to the point, people in tech aren't getting rich "because tech is evil" or some emotionally charged political rallying cry like that. Tech people are getting rich because every single one of us is willing to part with some of our money to pay them to produce things we can't resist consuming! And these companies are operating totally rationally according to the rules we give them (and are / are not willing to change as a society). It's like yelling at realtors getting rich when you're the one buying a house. Or cursing at the traffic jam you're sitting in. Or finding out that your minor recreational drug habit is causing a refugee crisis. There is so much money built up in wealth around the world, and tech has found a way to tap into it. Now, that raises other fundamental problems as we all know. But as long as we continue demanding these services, are you surprised that someone is making money from it? Or just unhappy it's not you and me?

paulpauper 6y ago
ppl love hotdogs. no one getting 7 figure making them.
- standardUser 6y ago
  I am sure there are plenty of executives at Tyson Foods pulling in 7 figure incomes, to name just one multinational that makes hot dogs.
- supernova87a 6y ago
  That's because everyone can make their own hotdogs or eat something else if they want, and there's little barrier to your local deli getting into the hotdog business if they wanted to. Google search, not so much.
jeffreyrogers 6y ago
They are getting rich because of their exposure to the financial markets and because tech is currently an industry that lots of capital is flowing into. It has less to do with what consumers are willing to spend money on than it does on that. If it were just about what people want to spend money on then people in agriculture would be getting rich too.
- thrill 6y ago
  Investment flows into the the tech where there are expectations of consumer interest.
  - Ericson2314 6y ago
    It's been little but "expectations" and Ponzie schemes for a decade. What do you expect next?
- Ericson2314 6y ago
  Yeah the shocking thing about tech is how little revenue there is relative to investments. GP is exactly wrong.
  - asdfasgasdgasdg 6y ago
    Maybe in startups. The companies that are generating these vast amounts of wealth are large tech cos like Apple, Google, Facebook, Microsoft, Oracle, Netflix, etc. which all are making absolute craptons of profit over the medium term.
    - Ericson2314 6y ago
      Right. The thing we saw before was expectation of the latter influencing expectations of the former, but that might be finally starting to change.
- paulpauper 6y ago
  a good tech product, especially in consumer and info tech, generates high profit margins and reliable recurring revenue protected by intellectual property , network effect,s and high intellectual barriers to entry. Other industries and sectors have lower margins and low barriers. This creates an incentive to spend a lot on capital, such as human capital, to produce such tech products.
pydry 6y ago
>But as long as we continue demanding these services Tech money seems to be made more via gatekeeping than providing a service. A friendly guy called Raul drives the taxi and provides the actual service. Uber puts itself between me and him. Uber doesn't make money if there are lots of people willing to be the go-between between me and Raul. Uber RAKES it in if they're one of two.
- sagarm 6y ago
  Did you use taxis before Lyft/Uber? They clearly improve the customer experience.
  - pydry 6y ago
    I did, yeah. They drove down the cost more than they improved the experience. It's neat not having to dig around for cash and being able to see your driver on your phone arriving but it's not game changing. The real innovation was using a tsunami of cheap financing to engage in a predatory pricing war to gain oligopoly status and opening up being a taxi driver to anyone with a car. This was basically exploitation of wealth inequality. When I visited Buenos Aires in 2011 I was shocked that you could easily send somebody on a scooter to get you a starbucks and people regularly did. That "innovation" seems significantly less shocking these days. The west caught up.
    - jimbob45 6y ago
      Yep, this is the right read. Uber exploited under-regulation in gig economy jobs and passed (part of) the savings onto users.
    - xiphias2 6y ago
      ,, opening up being a taxi driver to anyone with a car'' That's what customers want. Taxis were always too expensive for normal people to use. In the past they needed to know the routes to any place inside a city, but since we have GPS navigation, now that knowledge is much less useful. Nowdays I care more about the car being modern than the knowledge of the driver.

bdamm 6y ago

They understand it perfectly when solar panels appear on your roof, a Tesla appears in your driveway, and vacations appear on your docket.

standardUser 6y ago
Ah yes the luxurious trappings of... a slightly-above-middle-class family?
- witty_username 6y ago
  From https://www.evunite.com/blog/tesla-owner-demographics/ https://www.evunite.com/blog/tesla-owner-demographics/ : > Based on data pulled from 2,650 Tesla owners, the average household income of a Tesla Model X owner is $143,177 per year. > The average household income of a Tesla Model S owner is $153,313 per year. > This compares to the United States national medium household income of $78,500. 143k is about the 85th percentile ( https://en.wikipedia.org/wiki/Household_income_in_the_United_States#Distribution_of_household_income https://en.wikipedia.org/wiki/Household_income_in_the_United... ) So, this is at least upper middle class.
  - deleted 6y ago
    [deleted]
  - wskinner 6y ago
    Your census data is 7 years out of date. Has anything changed since then?
  - tayo42 6y ago
    Idk if the lifestyle is really that special. I think US income is just heavily weighted towards the bottom. Middle class is disappearing as wages stay low for most people. Tech isn't rich, just comparatively. Tech salaries are what almost Americans should be paid.
    - failwhaleshark 6y ago

sombremesa 6y ago

How rich people are getting, or how many people are getting "rich"? If you go for the former you should take an average, and it's not going to be impressive. If you go for the latter it'll be clear you're focused on a small minority, so it's not going to be impressive. So you have to go for something ambiguous and nebulous to impress people. No wonder you have a hard time "explaining" it!

deleted 6y ago
[deleted]

notacoward 6y ago

Wait until they find out how rich people in finance are getting. And, just like in tech, I don't mean the very tippy-top. I mean people who are barely above the equivalent of line workers, pulling in even more than their college roommates make in tech. But that's old news, and not NYT's sworn enemies, so I guess it's not as interesting to them.

mikeyouse 6y ago
There are roughly ~0 people in finance making a quarter million dollars per year right out of school, and there are tens of thousands of people in tech, probably hundreds of thousands. I know people in non-engineering, non-sales roles (e.g. recruiting and HR) at large tech cos buying 3rd houses in the Bay Area because their RSUs have appreciated so much so they're diversifying. It's absolutely insane how much wealth is being generated by the stock price run-up.
- hesarenu 6y ago
  quarter million dollars per year right out of school - really?
  - jeffreyrogers 6y ago
    I heard of that happening when I graduated, which was in 2016, so I would not be at all shocked if it's more common now.
  - kaesar14 6y ago
    Look at a new grad compensation thread on r/cscareerquestions if you don't believe it.
  - mikeyouse 6y ago
    In total comp - yeah. It's insane. That's what the OP twitter post is talking about. If we see a stock market crash, a lot of that will evaporate, but there is a really large cash component and RSUs are buoying everything to really high levels right now. Just a new grad thread from Reddit: https://www.reddit.com/r/cscareerquestions/comments/m635u7/official_salary_sharing_thread_for_new_grads/gr3koj5/ https://www.reddit.com/r/cscareerquestions/comments/m635u7/o... Anecdotally, my friend who just closed on their 3rd house runs engineering recruiting for a large public Bay Area company (and used to run their new grad hiring) so they've told me specifically what that company pays for grads of their target schools which they've obviously honed based on competing offers from other tech companies.

cowgoesmoo 6y ago

lol Kevin Roose is a clown "tech journalist" that writes exclusively bad faith hit pieces on tech companies. He and his "tech journalist" friends at NYT have no clue what is actually happening in tech. His only goal is to get people riled up and angry at tech companies.

comodore_ 6y ago
He's the spearhead of the NYT pro censorship by tech wing. He's bad faith activist disguised as a journalist.
paulpauper 6y ago
look how little engagement his tweets get. Big media with their billions of dollars cannot match even no-name accounts.
kaesar14 6y ago
What's wrong with this piece in particular?
- cowgoesmoo 6y ago
  The meat of the article is essentially saying "big tech got more customers because everyone moved online during the pandemic." Which is fine I guess, if a bit shallow and obvious. The last paragraph though, shows NYT's typical anti-tech bias. > Big Tech is emerging from the pandemic lean, mean and ready for a U.S. economy expected to roar back to life in 2021. Meanwhile, there are still long lines at food banks. Some American workers who lost their jobs last year may never get them back. Housing advocates are worried that millions of people will be evicted from their homes. And being Big Tech is an invitation for everyone to hate you — but you do have towering piles of money. They're trying so hard here to link "Big Tech"'s growth with pandemic-induced unemployment and housing crisis. What they say here is true in isolation. Big tech grew. There is unemployment and houses are getting pricier. But there's no evidence, in the article or otherwise, that these are linked whatsoever.
  - 6y ago

neogodless 6y ago

I see a Tweet with one reply. Is this a discussion of the NYTimes.com article[0]? [0] https://www.nytimes.com/2021/04/29/technology/big-tech-pandemic-economy.html https://www.nytimes.com/2021/04/29/technology/big-tech-pande...

barrenko 6y ago

Tech is an amplifier. Everything is at least volume x 20. And that includes risk as well. No one seems to want that part. No one wants burnout.

stunt 6y ago

What does tech people mean today? Farmers are richer where I live and I've been in tech for my entire life. And those farmers do use a lot of tech these day. Does it make them techies with these standard or not? Are we talking about software developers or entrepreneurs that happen to be using tech or have tech background? I'm definitely well above average, but I think there is an illusion about software engineers being rich. They are better than many other fields, but definitely not on the rich side. Go to LA and ask rich people what they do. I'm sure you will find a few "tech" entrepreneurs but you will be surprised how much people make in other professions.

failwhaleshark 6y ago

K-shaped recovery. There's a ubiquitous economic bifurcation that isn't obvious to the middle- and lower-classes. Want to know what economic inequality looks like? Well, there you go.