6 ms·

> The market could only sustain $150,000 a year salaries for grads fresh out of college for so long before someone somewhere along the way ran out of money. It

by jstx1 4y ago

> The market could only sustain $150,000 a year salaries for grads fresh out of college for so long before someone somewhere along the way ran out of money. It seems a bit arbirtrary to pick high salaries as the reason for it. And to not blame spending billions on unprofitable projects like the metaverse, or having their profits affected by Apple's restrictions on tracking, or the steady decline in user experience. or the general image of the company being affected by a long list of scandals... <<< I would blame these factors before I point at graduates who earn above the market average.

pavlov 4y ago
Hiring graduates at $200k is a major part of where the money goes when you’re spending billions on unprofitable software projects.
- mschuster91 4y ago
  I'd wager that astronomical housing costs are the biggest factor in these absurd salaries, followed by healthcare. In the end it's a circle of money, from investors to mega-companies to their employees to their landlords which are again part of the investor class. Healthcare is just the same.
  - deleted 4y ago
    [deleted]
  - neilparikh 4y ago
    > I'd wager that astronomical housing costs are the biggest factor in these absurd salaries, followed by healthcare. The causal relationship is in the opposite direction: high salaries cause high housing costs. Law of rent gives a theoretical explanation of this, but we can see this empirically too: rents go up in cities after tech companies with high salaries start opening up offices there, not before. There are also plenty of places with low rent that have higher tech salaries than places with higher rents (compare essentially any US city to Toronto). > In the end it's a circle of money, from investors to mega-companies to their employees to their landlords which are again part of the investor class. At least in California, there's not that much overlap between tech company investors and landowners. The housing ownership is much more distributed, and often to "mom and pop" landlords. This is the flow of money in Silicon Valley (expressed in a slightly comic manner): https://twitter.com/nextdoorsv/status/1400165321609199620 https://twitter.com/nextdoorsv/status/1400165321609199620 It's a bit different in other locations with more consolidation in land ownership, but even there, I doubt there's much overlap (I have less knowledge of housing dynamics outside California, because they actually change, so I'm just guessing here).
    - mschuster91 4y ago
      > Law of rent gives a theoretical explanation of this, but we can see this empirically too: rents go up in cities after tech companies with high salaries start opening up offices there, not before. I think it's actually both - when tech companies enter a new town, they tend to hire boatloads of people, placing pressure on local housing markets, and thus raising prices - and landlords or people willing to sell and relocate to take a quick and easy profit know that the new class of people has substantial money to pay. What I was referring to was stuff like [1] or [2] - investors with no real option to park "dumb money" (aka funds that are structured to invest into low-ish risk markets) have discovered that soaking up residential real estate is a good way to invest that money. [1] https://www.nytimes.com/2022/04/23/us/corporate-real-estate-investors-housing-market.html https://www.nytimes.com/2022/04/23/us/corporate-real-estate-... [2] https://www.businessinsider.com/investors-bought-third-us-homes-january-john-burns-real-estate-2022-4 https://www.businessinsider.com/investors-bought-third-us-ho...
- initplus 4y ago
  Those projects aren't unprofitable because production costs are too high. The projects are unprofitable & failing because Facebook is struggling to execute on their grand plans, and are having their traditional core business eaten by a more nimble upstart competitor (TikTok). I'm sure FB would love to be able to spend 2x on salaries if it came with a guarantee of turning the metaverse into a successful business venture, or of grabbing all the attention hours currently flowing to TikTok.
- roncesvalles 4y ago
  It could very well be that they didn't pay enough. My hypothesis for why tech pays so well is because success depends very heavily on the quality of the talent, and a few people can be the difference between billions of dollars in lost money vs. a machine that makes billions of dollars in annual recurring income. It's hard to claim that a project failed because its budget was too big.
  - yobbo 4y ago
    Income = Revenue - Expenses
systemvoltage 4y ago
Where does the budget for failed projects go? Server hardware? Think not. They go into paying exorbitant salaries (engineering and marketing).
- deleted 4y ago
  [deleted]
username_my1 4y ago
Meta verse could be the next big thing and the long shot facebook needs. It just happened that out of their control 1. Apple squeezed them out of ads revenue 2. Market went to shit I hate Facebook as a company but I don’t see them making strategic mistakes…. Everyone is getting fired everywhere
- martin_a 4y ago
  > Metaverse could be the next big thing and the long shot facebook needs. I'm skeptical. With all their money and knowledge and whatnot, they've only managed to create something that looks like a dated console party game but not more. I don't see how that's the future. Furthermore, do they expect everyone to buy a... say... $400 headset to use the Metaverse? The low entry barrier was probably one of the biggest reasons for the success of Facebook. If you need specialized equipment nobody will use it.
  - kaptainscarlet 4y ago
    Couldn't agree more. The headset at $400 will be a high barrier to entry. If the metaverse was built on top of the smartphone then it would get most probably pernetrate the market faster.
  - username_my1 4y ago
    have you ever heard of the concept of iterations? do you remember how the first mobile phone looked like? do you remember how the first computer looked like? first laptop ? first electric car ? that's the point of R&D and long shot, if it was possible already it's not a long shot :/
    - martin_a 4y ago
      It's 2022 and we have powerful 3D engines for computer games since years. No need for FB to reinvent the Wii look if ask me.
  - mFixman 4y ago
    The headset is the reason why they are doing this in the first place. Nobody expected people to buy a $300 iPhone in 2007 or a $500 iPad in 2011, but when they did they gave Apple money-printing machine that can also bankrupt competitors. Meta just needs a killer feature for the Metaverse. During the pandemic they bet hard on office-by-VR, but they moved too slowly missed the pandemic and many other deadlines before making a good product.

by jstx1 4y ago

pavlov 4y ago

Hiring graduates at $200k is a major part of where the money goes when you’re spending billions on unprofitable software projects.

mschuster91 4y ago
I'd wager that astronomical housing costs are the biggest factor in these absurd salaries, followed by healthcare. In the end it's a circle of money, from investors to mega-companies to their employees to their landlords which are again part of the investor class. Healthcare is just the same.
- deleted 4y ago
  [deleted]
- neilparikh 4y ago
  > I'd wager that astronomical housing costs are the biggest factor in these absurd salaries, followed by healthcare. The causal relationship is in the opposite direction: high salaries cause high housing costs. Law of rent gives a theoretical explanation of this, but we can see this empirically too: rents go up in cities after tech companies with high salaries start opening up offices there, not before. There are also plenty of places with low rent that have higher tech salaries than places with higher rents (compare essentially any US city to Toronto). > In the end it's a circle of money, from investors to mega-companies to their employees to their landlords which are again part of the investor class. At least in California, there's not that much overlap between tech company investors and landowners. The housing ownership is much more distributed, and often to "mom and pop" landlords. This is the flow of money in Silicon Valley (expressed in a slightly comic manner): https://twitter.com/nextdoorsv/status/1400165321609199620 https://twitter.com/nextdoorsv/status/1400165321609199620 It's a bit different in other locations with more consolidation in land ownership, but even there, I doubt there's much overlap (I have less knowledge of housing dynamics outside California, because they actually change, so I'm just guessing here).
  - mschuster91 4y ago
    > Law of rent gives a theoretical explanation of this, but we can see this empirically too: rents go up in cities after tech companies with high salaries start opening up offices there, not before. I think it's actually both - when tech companies enter a new town, they tend to hire boatloads of people, placing pressure on local housing markets, and thus raising prices - and landlords or people willing to sell and relocate to take a quick and easy profit know that the new class of people has substantial money to pay. What I was referring to was stuff like [1] or [2] - investors with no real option to park "dumb money" (aka funds that are structured to invest into low-ish risk markets) have discovered that soaking up residential real estate is a good way to invest that money. [1] https://www.nytimes.com/2022/04/23/us/corporate-real-estate-investors-housing-market.html https://www.nytimes.com/2022/04/23/us/corporate-real-estate-... [2] https://www.businessinsider.com/investors-bought-third-us-homes-january-john-burns-real-estate-2022-4 https://www.businessinsider.com/investors-bought-third-us-ho...
initplus 4y ago
Those projects aren't unprofitable because production costs are too high. The projects are unprofitable & failing because Facebook is struggling to execute on their grand plans, and are having their traditional core business eaten by a more nimble upstart competitor (TikTok). I'm sure FB would love to be able to spend 2x on salaries if it came with a guarantee of turning the metaverse into a successful business venture, or of grabbing all the attention hours currently flowing to TikTok.
roncesvalles 4y ago
It could very well be that they didn't pay enough. My hypothesis for why tech pays so well is because success depends very heavily on the quality of the talent, and a few people can be the difference between billions of dollars in lost money vs. a machine that makes billions of dollars in annual recurring income. It's hard to claim that a project failed because its budget was too big.
- yobbo 4y ago
  Income = Revenue - Expenses

systemvoltage 4y ago

Where does the budget for failed projects go? Server hardware? Think not. They go into paying exorbitant salaries (engineering and marketing).

deleted 4y ago
[deleted]

username_my1 4y ago

Meta verse could be the next big thing and the long shot facebook needs. It just happened that out of their control 1. Apple squeezed them out of ads revenue 2. Market went to shit I hate Facebook as a company but I don’t see them making strategic mistakes…. Everyone is getting fired everywhere

martin_a 4y ago
> Metaverse could be the next big thing and the long shot facebook needs. I'm skeptical. With all their money and knowledge and whatnot, they've only managed to create something that looks like a dated console party game but not more. I don't see how that's the future. Furthermore, do they expect everyone to buy a... say... $400 headset to use the Metaverse? The low entry barrier was probably one of the biggest reasons for the success of Facebook. If you need specialized equipment nobody will use it.
- kaptainscarlet 4y ago
  Couldn't agree more. The headset at $400 will be a high barrier to entry. If the metaverse was built on top of the smartphone then it would get most probably pernetrate the market faster.
- username_my1 4y ago
  have you ever heard of the concept of iterations? do you remember how the first mobile phone looked like? do you remember how the first computer looked like? first laptop ? first electric car ? that's the point of R&D and long shot, if it was possible already it's not a long shot :/
  - martin_a 4y ago
    It's 2022 and we have powerful 3D engines for computer games since years. No need for FB to reinvent the Wii look if ask me.
- mFixman 4y ago
  The headset is the reason why they are doing this in the first place. Nobody expected people to buy a $300 iPhone in 2007 or a $500 iPad in 2011, but when they did they gave Apple money-printing machine that can also bankrupt competitors. Meta just needs a killer feature for the Metaverse. During the pandemic they bet hard on office-by-VR, but they moved too slowly missed the pandemic and many other deadlines before making a good product.