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I agree with you on amazon, but I think the author does have a point. Take FB as an example. FB have 60k employees, 12X the 2012 IPO number. It also costs 12X

by netcan 5y ago

I agree with you on amazon, but I think the author does have a point. Take FB as an example. FB have 60k employees, 12X the 2012 IPO number. It also costs 12X to run facebook today. They don't do that much more today than in 2012. They mostly just do things a more complicated way. IMO, the reason for that is actually revenue. Beyond a point, there's no market discipline reason for mitigating costs. FB is profitable enough with its >30% margins. Investors don't want them to cut the salary bill. They want FB to hire people, invest, do more stuff & grow. If FB revenues had plateaued around $10bn, I'm pretty sure FB would still exist. FB would have 90% fewer employees and users would not experience much difference. Once you have all these extra people, and basically the same set of tasks at hand... sluggish ways of doing things and inefficiency are basically guaranteed. If 500 devs are now working on an area that 50 people previously ran, it's going to look like ineffectiveness at the ground level. A lot of the software industry is like that. Half the industry, like most internal dev orgs are not very capable or motivated, and things look sluggish at ground level. The other half is flooded with cash and great devs, but teams are bigger than actually necessary.

Dumblydorr 5y ago
My question: what is new about what FB is doing currently? Are they attempting to maintain their current influence and social network? Stem the tide of anti social media talk? Encourage controversial misinformation? What do they need the employees for? Is it to improve their image for investors?
- netcan 5y ago
  >> what is new about what FB is doing currently? You'd find the same sort of answers at FB that you'd find at citibank. They have regulatory challenges, content moderation challenges. Corporate structure challenges left over from acquisitions or whatnot. I'm sure there are a ton of items on the todo/doing/done lists. There are "new and exciting" projects, oculus VR, whatever is happening with the marketplace, etc. Same thing at citibank. From the perspective of a manager there, I imagine it looks like they're doing a ton of stuff all the time.
kleinsch 5y ago
Not a great example. FB’s product surface is easily 10x 2012. If you think FB == news feed, go dig into the app. Marketplace didn’t exist in 2012, for example. Also, IG acquisition was in 2012 post-IPO, WhatsApp and Oculus were after that.
- netcan 5y ago
  Possibly. I've had this conversation a few times and I find it mostly unresolveable. There's no useful measure of FB's efficiency, what 10X more FB means... so we can't externally measure the claim. Whether or not someone agrees with me or you probably relates to what we think about work & efficiency broadly.
  - kleinsch 5y ago
    I think there are two parts, one which is resolvable and one which isn't. FB doesn't "do that much more today than in 2012" - completely resolvable. I hear statements like this all the time. FB/Google/Amazon don't do more, they just do it bigger, or they just hire engs to keep them from the competition, etc. FB had 3000 employees total at IPO. I can easily name 10 brand new things launched/acquired since IPO that each have a massive user base and at least 1000 engineers on them now. I'm sure people could do the same for Google, Amazon, Apple. The unresolvable part - are the 60K employees at FB today individually doing as much as the 3K employees were at IPO? Personally, I doubt it. The luxury of being big means you can try more ambitious stuff that may never launch, overbuild on infra and process, etc. The flipside is that niche features you've never heard of can drive millions in revenue bc of the scale of the userbase and business customers.
    - netcan 5y ago
      I disagree... "10 brand new things launched/acquired" is not a measurable quantity. You could tally up the employees that worked at these companies pre acquisition... but to total is a lot bigger. There's also the fact that in software, you have something once you build it. Software is cumulative, so you'd expect it to grow as long as someone is working on it. There are various points of evidence, but they're all arguable.
disgruntledphd2 5y ago
> They don't do that much more today than in 2012 Just to note, often sales will scale linearly with revenue, and certainly most well-run companies will match revenue to headcount growth. But yeah, it's certainly possible that FB could be run much leaner, but then they'd be getting even more flack from governments/NGO's/hacker news etc.
ProblemFactory 5y ago
> Take FB as an example. FB have 60k employees, 12X the 2012 IPO number. It also costs 12X to run facebook today. They don't do that much more today than in 2012. They do. In 2012, their advertising revenue was $5B. In 2020, it was $86B. They are "doing" 17x more now. I don't mean that from your perspective of revenue leading to wasteful spending, but from an advertising product perspective. If you're making $86B in advertising revenue, then every junior data scientist whose entire job might be to optimise ad click-throughs for cat food in Mongolia by 3% is a net win for the company. If they are getting better at cat food ads, they are doing more.
- netcan 5y ago
  More revenue, yes. That was my point. Revenue rises, and everything else grows with it regardless of need. Whether or not the marginal junior data scientist is a net win for the company.... I suspect not at a company like FB. Efficiency is hard. Factories are efficient because margins are slim and capital costs are high. FB is the opposite. There's no external disciplinarian forcing managers to find ways of minimizing junior data scientist headcount. FB profit margin this year is 37%. When margins are that high, there's not much incentive to cut fat. If profit margin is 3%, a 1% efficiency gain is a major win. At 37%... different game.

by netcan 5y ago

Dumblydorr 5y ago

My question: what is new about what FB is doing currently? Are they attempting to maintain their current influence and social network? Stem the tide of anti social media talk? Encourage controversial misinformation? What do they need the employees for? Is it to improve their image for investors?

netcan 5y ago
>> what is new about what FB is doing currently? You'd find the same sort of answers at FB that you'd find at citibank. They have regulatory challenges, content moderation challenges. Corporate structure challenges left over from acquisitions or whatnot. I'm sure there are a ton of items on the todo/doing/done lists. There are "new and exciting" projects, oculus VR, whatever is happening with the marketplace, etc. Same thing at citibank. From the perspective of a manager there, I imagine it looks like they're doing a ton of stuff all the time.

kleinsch 5y ago

Not a great example. FB’s product surface is easily 10x 2012. If you think FB == news feed, go dig into the app. Marketplace didn’t exist in 2012, for example. Also, IG acquisition was in 2012 post-IPO, WhatsApp and Oculus were after that.

netcan 5y ago
Possibly. I've had this conversation a few times and I find it mostly unresolveable. There's no useful measure of FB's efficiency, what 10X more FB means... so we can't externally measure the claim. Whether or not someone agrees with me or you probably relates to what we think about work & efficiency broadly.
- kleinsch 5y ago
  I think there are two parts, one which is resolvable and one which isn't. FB doesn't "do that much more today than in 2012" - completely resolvable. I hear statements like this all the time. FB/Google/Amazon don't do more, they just do it bigger, or they just hire engs to keep them from the competition, etc. FB had 3000 employees total at IPO. I can easily name 10 brand new things launched/acquired since IPO that each have a massive user base and at least 1000 engineers on them now. I'm sure people could do the same for Google, Amazon, Apple. The unresolvable part - are the 60K employees at FB today individually doing as much as the 3K employees were at IPO? Personally, I doubt it. The luxury of being big means you can try more ambitious stuff that may never launch, overbuild on infra and process, etc. The flipside is that niche features you've never heard of can drive millions in revenue bc of the scale of the userbase and business customers.
  - netcan 5y ago
    I disagree... "10 brand new things launched/acquired" is not a measurable quantity. You could tally up the employees that worked at these companies pre acquisition... but to total is a lot bigger. There's also the fact that in software, you have something once you build it. Software is cumulative, so you'd expect it to grow as long as someone is working on it. There are various points of evidence, but they're all arguable.

disgruntledphd2 5y ago

> They don't do that much more today than in 2012 Just to note, often sales will scale linearly with revenue, and certainly most well-run companies will match revenue to headcount growth. But yeah, it's certainly possible that FB could be run much leaner, but then they'd be getting even more flack from governments/NGO's/hacker news etc.

ProblemFactory 5y ago

> Take FB as an example. FB have 60k employees, 12X the 2012 IPO number. It also costs 12X to run facebook today. They don't do that much more today than in 2012. They do. In 2012, their advertising revenue was $5B. In 2020, it was $86B. They are "doing" 17x more now. I don't mean that from your perspective of revenue leading to wasteful spending, but from an advertising product perspective. If you're making $86B in advertising revenue, then every junior data scientist whose entire job might be to optimise ad click-throughs for cat food in Mongolia by 3% is a net win for the company. If they are getting better at cat food ads, they are doing more.

netcan 5y ago
More revenue, yes. That was my point. Revenue rises, and everything else grows with it regardless of need. Whether or not the marginal junior data scientist is a net win for the company.... I suspect not at a company like FB. Efficiency is hard. Factories are efficient because margins are slim and capital costs are high. FB is the opposite. There's no external disciplinarian forcing managers to find ways of minimizing junior data scientist headcount. FB profit margin this year is 37%. When margins are that high, there's not much incentive to cut fat. If profit margin is 3%, a 1% efficiency gain is a major win. At 37%... different game.