3 ms·

Why is it smart? At best it is short sighted profit while ignoring the human factor. I wouldn't call that smart, just greedy and abusive.

PaywallBuster 5y ago
not necessary: These companies have limited traction, keep them as is and they will die a slowly death after some years. Or significantly reduce costs (by going offshore - probably with a smaller team), makes numbers much more attractive and sustainable long term.
- stagger87 5y ago
  In my experience, "going offshore" as you put it, simply prolongs an inevitable death, while simultaneously funneling more money to the top.
AniseAbyss 5y ago
There is a lot of less critical IT work that can be sweatshopped in India and other Asian countries. In fact considering the huge labour shortage and increasing population decline/aging of G20 countries I see it as inevitable.
missedthecue 5y ago
You don't need elite Stanford CS PhDs to maintain a 20 year old enterprise payroll processor or network monitoring service. Polish and Ukrainian devs can do that work perfectly well. Have a small sales team that does just enough work to cover whatever your churn rate is, and your business will print a stable amount of money for a long time. Combine this with acquiring at low multiples, and it's a decent strategy. Sure, you might not grow your platform at 80% a year, with massive series A, B, C, D, E, and a unicorn IPO, but you don't need to for the strategy to work over the long term.
- caskstrength 5y ago
  > You don't need elite Stanford CS PhDs to maintain a 20 year old enterprise payroll processor or network monitoring service. Polish and Ukrainian devs can do that work perfectly well. This is most bigoted statement I read on hn recently. What is your work? For some reason I'm quite sure that a lot of Ukrainian or Polish devs can do it "perfectly well" also...
  - missedthecue 5y ago
    I work in customer support. Most of my profession is made up of overseas workers, and they do their jobs as well or better than me. In fact, Polish and Ukrainian devs would be overqualified for what I do. My comment isn't denigrating IT professionals in foreign countries. It's stating that hiring capable, but less credentialed workers is not a losing strategy by default. The parent comment I replied to seemed to assume that replacing domestic employees with foreign employees was the fast track to business ruin. I happen to disagree with that.
anonAndOn 5y ago
This is a FCF play[0]. The lower your COGS, the more FCF it generates every month. [0]https://corporatefinanceinstitute.com/resources/knowledge/valuation/what-is-free-cash-flow-fcf/ https://corporatefinanceinstitute.com/resources/knowledge/va...
ozim 5y ago
It is smart because they buy up "not so great" businesses and squeeze money out of them. Where the founder could die on the hill fighting for bright future and burn cash. While as I read their buying tactics and employee dumping tactics it is despicable. But in life there is also place for scavengers that play important role ... because maybe company they bought would die in even worse way then what they do.

PaywallBuster 5y ago

not necessary: These companies have limited traction, keep them as is and they will die a slowly death after some years. Or significantly reduce costs (by going offshore - probably with a smaller team), makes numbers much more attractive and sustainable long term.

stagger87 5y ago
In my experience, "going offshore" as you put it, simply prolongs an inevitable death, while simultaneously funneling more money to the top.

AniseAbyss 5y ago

There is a lot of less critical IT work that can be sweatshopped in India and other Asian countries. In fact considering the huge labour shortage and increasing population decline/aging of G20 countries I see it as inevitable.

missedthecue 5y ago

You don't need elite Stanford CS PhDs to maintain a 20 year old enterprise payroll processor or network monitoring service. Polish and Ukrainian devs can do that work perfectly well. Have a small sales team that does just enough work to cover whatever your churn rate is, and your business will print a stable amount of money for a long time. Combine this with acquiring at low multiples, and it's a decent strategy. Sure, you might not grow your platform at 80% a year, with massive series A, B, C, D, E, and a unicorn IPO, but you don't need to for the strategy to work over the long term.

caskstrength 5y ago
> You don't need elite Stanford CS PhDs to maintain a 20 year old enterprise payroll processor or network monitoring service. Polish and Ukrainian devs can do that work perfectly well. This is most bigoted statement I read on hn recently. What is your work? For some reason I'm quite sure that a lot of Ukrainian or Polish devs can do it "perfectly well" also...
- missedthecue 5y ago
  I work in customer support. Most of my profession is made up of overseas workers, and they do their jobs as well or better than me. In fact, Polish and Ukrainian devs would be overqualified for what I do. My comment isn't denigrating IT professionals in foreign countries. It's stating that hiring capable, but less credentialed workers is not a losing strategy by default. The parent comment I replied to seemed to assume that replacing domestic employees with foreign employees was the fast track to business ruin. I happen to disagree with that.

anonAndOn 5y ago

This is a FCF play[0]. The lower your COGS, the more FCF it generates every month. [0]https://corporatefinanceinstitute.com/resources/knowledge/valuation/what-is-free-cash-flow-fcf/ https://corporatefinanceinstitute.com/resources/knowledge/va...

ozim 5y ago

It is smart because they buy up "not so great" businesses and squeeze money out of them. Where the founder could die on the hill fighting for bright future and burn cash. While as I read their buying tactics and employee dumping tactics it is despicable. But in life there is also place for scavengers that play important role ... because maybe company they bought would die in even worse way then what they do.