8 ms·

Are we about to enter a new era of ultra-profitable tech companies? While companies like GOOG and MSFT have had ridiculously healthy margins compared to tradit

by kypro 4y ago

Are we about to enter a new era of ultra-profitable tech companies? While companies like GOOG and MSFT have had ridiculously healthy margins compared to traditional industries for some time now, it's also been clear in recent years that these companies have become very loose with spending. Take GOOG for example, they spend so much unnecessary money on fancy offices, free lunches, diversity programs, highly speculative investments, stock based comp, etc. But perhaps more importantly what happens when all the unprofitable tech companies with 80% gross margins decide to operate profitably? A lot of companies are so wasteful in tech today that they're actually choosing not to operate profitably so they can grow faster. We've seen Uber basically do a u-turn on this stance, but many other companies are following suite. The media seems to think these cuts are a sign that tech companies are struggling and other industries like energy will now take the lead, but surely being able to drop 10-50% of your workforce with almost no consequences is a sign of strength not weakness? I guess this whole time the most profitable companies in the world apparently weren't even trying that hard to be profitable.

jensensbutton 4y ago
> diversity programs... Not even remotely comparable to the other things you listed. People such as yourself seemingly can't stop talking about it though, despite it having no effect on your life.
- type-r 4y ago
  for a period of time, one of my previous employers had an unwritten policy that you couldn't send a job offer to a non diversity applicant at our headquarters. so yeah, these programs can actually have a pretty big impact on my life.
  - jensensbutton 4y ago
    Yeah, google doesn't have that. So it doesn't affect your life.
- rippercushions 4y ago
  Diversity programs have considerable side effects: there's both pressure to hire people who tick DEI boxes, and equivalent resistance to get rid of those who are underperforming. And neither of these does any favors to those who are qualified, but get tarred with the suspicion of being the dreaded "diversity hire".
- kypro 4y ago
  Well I don't know about GOOG specifically, but I know there has been relatively large diversity teams at every tech company I've worked for in recent years. Again, not GOOG specifically, but it's not uncommon for companies like this to have employees whose job it is to email people informing them to do things like rename their project's master branch to main. There have also been efforts within companies like GOOG to bring in employees who are less qualified simply because they're female or are of a certain racial group. My point about diversity programs is not that the team itself is expensive, but that when these companies push politically-motivative policies within an organisation they often cause larger inefficiencies and disruption. We've seen this in several companies in recent years such as Coinbase and Netflix. Whether you believe diversity and inclusion is important isn't really relevant to the profitability point my comment was focusing on. I also don't think it's necessarily comparable to the other things I listed and was actually considering not including it because I know there's always someone like yourself who will just focus solely on the politics and not my point. For example you didn't take issue with my point about their over hiring of kitchen staff? That's probably a much smaller expense and arguably doesn't have the larger productivity costs of diversity programs - it may in fact boost productivity.
  - vervez 4y ago
    I think many of the things you mentioned w.r.t. diversity is actually forward-thinking and potentially yields more returns later. If there's a brilliant swe that feels uncomfortable at a company because of how they name their branches, they won't work there. Same goes for hiring a "less-qualified" individual. How many decisions or projects can be improved because of a diversity of input? Again, a non-linear outcome that is harder to measure than immediate profitability. Those are some arguments for those programs focusing on your productivity point.
    - tristor 4y ago
      The issue with your arguments in response is the issue with the entire way DEI is structured in industry. It's not that diversity is unimportant, diversity of /thoughts/ and /beliefs/ is critical to building products that appeal to the widest audience/target market. It's that the way programs are implemented focus on the wrong things, and worse are based on this type of wishy-washy thinking. Your argument amounts to a completely unsubstantiated what-if "[What] if there's a brilliant swe that feels uncomfortable at a company because of how they name their branches..." Here's a counter-argument: Productive driven people don't get distracted by irrelevant and petty things like what the repository branch is named in the private repo that no customer ever sees. This is the type of petty nonsense that bureaucracy loves though, and bureaucracy kills innovation, creativity, and productivity. The entire issue with DEI isn't that opponents think diversity is bad, or that we're against hiring people from diverse backgrounds, it's that the way DEI is implemented is a cancerous bureaucracy that kills companies and teams. It's just another form of the massive spread of administration/non-productive management across large organizations within the West. There's now close to (or in excess of) 1:1 administrators to faculty in most universities in the US, and the majority of the administrative hires are in DEI. These bureaucracies work to advance the bureaucracy, not to advance the mission of the organization they purport to represent. The massive waste of money on administration in hospitals, insurance companies, universities, and large corporations does not make these organizations improve patient outcomes, improve education of students, reduce medical costs to society, or improve products in the market that people rely on in their day to day lives. It's just a huge pile of burning money supporting the existence of roles that effectively detract from the overall productivity and quality of organizations. This isn't just DEI, by the way, it's all forms of unnecessary bureaucracy. It's one of the reasons why we need stronger anti-trust, because this is an inherent cancer to large organizations. The only solution for which is to have smaller organizations in the first place, so they can be razor focused on their actual core mission and not burning mountains of cash on administrative boondoggles.
- refused_cov_vax 4y ago
  >I rank the odds of you getting hurt by these specific discrimination practices aimed at you low, so stop mentioning them! No. Humans are not equal in aptitude. Neither are human groups. Either account for it, or don't, but be consistent.
- netheril96 4y ago
  > despite it having no effect on your life. How could it have no effect on our lives? It has effect when you compete against a diversity hire, it has effect when you have to work with a diversity hire, it has effect when your manager has to decide who to lay off when your coworker is a diversity hire.
  - deleted 4y ago
    [deleted]
  - John23832 4y ago
    Of all of the minorities in the world, even of the subset that may compete with you on for a position, you just CAN'T fathom that some of them may be better than you? That in even competition, this person, who just happens to be a (gender, racial, sexual orientation, ability, religous) minority is better than you at the position you're chose to apply for? Framing your competition as diversity hires (and contemplating the outsized concern that they have on your life) says more about than you think. You're the bottom of the barrel at what you do. "Diversity hires" don't compete at a high level. I for one know that if my competition wins, whether they are a minority or not, they do it on skill. I've elevated myself out of the concerns of competing with diversity hires, because I'm great at what I do. Level up.
    - netheril96 4y ago
      Tell me more about how Asian Americans have to have better grades than Whites, Blacks and Latinos to get into the same school because they are somehow worse.
      - John23832 4y ago
        Because amongst similarly qualified candidates we are THEN allowed to differentiate. It's the same reason you may pursue extracurricular and then put them on your college resume. Differentiation. Where's your crocodile tears for Vietnamese kid from south central (where the Vietnamese in America are on the lower end of the economic scale) who is admitted to Harvard instead of a Chinese, Korean, Japanese, or Indian kid from a well to do family? Lets segment Asian Americans and see how you feel. When opportunity is equally earned, we can then look to representation. Your argument is just an attempt to claim all spoils.
- elektrontamer 4y ago
  It does have an effect on his life if the group he belongs to isn't a "diverse" one. I say this as someone who would probably be considered "diverse", I'd like to be judged based on my merits not by diversity quotas the blue haired gestapo has dictated.
  - ineedasername 4y ago
    >blue haired I don't understand this reference. What does blue hair (assuming metaphorical and not literal?) mean in this context?
    - elektrontamer 4y ago
      Maybe it's just another way for them to revolt against society, or they just really like the way it looks. I don't really know why but dying their hair in some outlandish color is pretty popular with that crowd. I'm not against it by the way, it looks nice when done well.
    - teh64 4y ago
      [dead]
    - UncleMeat 4y ago
      People that care about these topics are often slandered as "women with dyed hair." It is a way of creating an outgroup.
    - occamsrazorwit 4y ago
      It's a literal meaning referring to the idea of a secret ruling class of leftist women in society. They're assumed to have all this societal influence and control ("blue-haired gestapo") despite no actual leaders resembling this. I feel like the burden of proof is pretty high for claims like this.
    - MandieD 4y ago
      Amusingly enough, “blue hairs” has long been slang for elderly women - a lot of old women used to put a bit of bluing in their yellowish grey hair to make it look whiter/more silvery, and some of them overdid it a bit at times. What’s bluing? A non-permanent blue dye that used to be used when rinsing white shirts to make them look less yellowed. It’s still sold, but I don’t know anyone under 60 who still buys it. Amused by this shift in meaning, mostly because I’m now the female equivalent of a “grey beard” in tech, old enough to have experienced the Dotcom bust - there is a fair bit of silver in my hair, and I can’t be bothered to cover it. “Grey bun”?
- mbesto 4y ago
  I think this sentiment comes from Universities (which do have cases of bloated diversity groups) and then that sentiment is passed on to the idea corporations, which to your point are a drop in the ocean in terms of overall costs.
prakhar897 4y ago
A few years ago, I built an exact replica of a Saas product I saw online and priced it 1/3 theirs. The actual founder went mad and started a smear campaign. Lucky for him, Workload at my regular job picked up and I abandoned the project, but this highlighted the weak moats of most of these products. and this is the main reason most companies overhire. It's so that engineers are less inclined to go home and build their own competitor.
- simmerup 4y ago
  The other way to view is that even though you could undercut that business by two thirds, you didn’t make enough profit to make it worth pursuing over your day job. So maybe you were selling it far too cheap after all.
  - prakhar897 4y ago
    I would've made significant more than my day job just by subscriptions (not counting share value). I had just joined workforce and leaving it so early didn't seem right to me.
- FlyingSnake 4y ago
  For most of these companies sales and marketing is the moat. Edit: curious to know what was the SaaS that got rattled by your fun experiment.
  - prakhar897 4y ago
    I'll dm u :)
- simonswords82 4y ago
  > and this is the main reason most companies overhire. It's so that engineers are less inclined to go home and build their own competitor. This is most definitely not true.
- threadweaver34 4y ago
  If hosting is cheap, I'd be tempted to put it out for free just to up the ante with the other company.
gcr 4y ago
This guy! Imagine thinking “diversity programs” are a significant cost center, as if their spend were comparable to real estate or employee compensation
- jimbob45 4y ago
  It's not really about the cost though, is it? If they were donating to the KKK or literally setting cash on fire, I doubt you'd have the same outlook. Wasted or misspent money is never something to overlook, particularly when you could have justified keeping a few more employees on if you'd just stopped setting money on fire.
  - pjc50 4y ago
    Watch out for the PACs. https://www.protocol.com/tech-company-pacs-2019-2020 https://www.protocol.com/tech-company-pacs-2019-2020 (somewhere between donating to the KKK, setting it on fire, and using it for bribes). I wonder what a company that donates equally to both sides is trying to achieve, hmm?
    - jimbob45 4y ago
      I don't know if you're American or not but that's a common strategy to select higher quality candidates for your side whilst selecting the lowest possible quality candidate for the opposing side via the primary process. That said, that's not always the case and you could absolutely be right.
  - minsc_and_boo 4y ago
    Companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians. Falsely equivocating spending on diversity programs to "donating to the KKK or literally setting cash on fire" is really telling. This monthly discussion comes up on HN and it's already turning into a dumpster fire.
    - it_citizen 4y ago
cutenewt 4y ago
I doubt it. It feels more like the end of an era. All the so called "cool" technologies from FAANG names in the last 15 years have lost its luster. There's a new set of companies that are ready to take over. The most obvious ones to fall to the wayside are the ones threatened by ChatGPT and TikTok. Who knew tech could be trendy?
- mathverse 4y ago
  That’s absolutely out of touch with reality. The owner of TikTok Bytedance was massively laying off people already. It is nowhere as profitable as any of the FAANGs. ChatGPT is nowhere a product that can pay for itself.

by kypro 4y ago

jensensbutton 4y ago

> diversity programs... Not even remotely comparable to the other things you listed. People such as yourself seemingly can't stop talking about it though, despite it having no effect on your life.

type-r 4y ago
for a period of time, one of my previous employers had an unwritten policy that you couldn't send a job offer to a non diversity applicant at our headquarters. so yeah, these programs can actually have a pretty big impact on my life.
- jensensbutton 4y ago
  Yeah, google doesn't have that. So it doesn't affect your life.
rippercushions 4y ago
Diversity programs have considerable side effects: there's both pressure to hire people who tick DEI boxes, and equivalent resistance to get rid of those who are underperforming. And neither of these does any favors to those who are qualified, but get tarred with the suspicion of being the dreaded "diversity hire".
kypro 4y ago
Well I don't know about GOOG specifically, but I know there has been relatively large diversity teams at every tech company I've worked for in recent years. Again, not GOOG specifically, but it's not uncommon for companies like this to have employees whose job it is to email people informing them to do things like rename their project's master branch to main. There have also been efforts within companies like GOOG to bring in employees who are less qualified simply because they're female or are of a certain racial group. My point about diversity programs is not that the team itself is expensive, but that when these companies push politically-motivative policies within an organisation they often cause larger inefficiencies and disruption. We've seen this in several companies in recent years such as Coinbase and Netflix. Whether you believe diversity and inclusion is important isn't really relevant to the profitability point my comment was focusing on. I also don't think it's necessarily comparable to the other things I listed and was actually considering not including it because I know there's always someone like yourself who will just focus solely on the politics and not my point. For example you didn't take issue with my point about their over hiring of kitchen staff? That's probably a much smaller expense and arguably doesn't have the larger productivity costs of diversity programs - it may in fact boost productivity.
- vervez 4y ago
  I think many of the things you mentioned w.r.t. diversity is actually forward-thinking and potentially yields more returns later. If there's a brilliant swe that feels uncomfortable at a company because of how they name their branches, they won't work there. Same goes for hiring a "less-qualified" individual. How many decisions or projects can be improved because of a diversity of input? Again, a non-linear outcome that is harder to measure than immediate profitability. Those are some arguments for those programs focusing on your productivity point.
  - tristor 4y ago
    The issue with your arguments in response is the issue with the entire way DEI is structured in industry. It's not that diversity is unimportant, diversity of /thoughts/ and /beliefs/ is critical to building products that appeal to the widest audience/target market. It's that the way programs are implemented focus on the wrong things, and worse are based on this type of wishy-washy thinking. Your argument amounts to a completely unsubstantiated what-if "[What] if there's a brilliant swe that feels uncomfortable at a company because of how they name their branches..." Here's a counter-argument: Productive driven people don't get distracted by irrelevant and petty things like what the repository branch is named in the private repo that no customer ever sees. This is the type of petty nonsense that bureaucracy loves though, and bureaucracy kills innovation, creativity, and productivity. The entire issue with DEI isn't that opponents think diversity is bad, or that we're against hiring people from diverse backgrounds, it's that the way DEI is implemented is a cancerous bureaucracy that kills companies and teams. It's just another form of the massive spread of administration/non-productive management across large organizations within the West. There's now close to (or in excess of) 1:1 administrators to faculty in most universities in the US, and the majority of the administrative hires are in DEI. These bureaucracies work to advance the bureaucracy, not to advance the mission of the organization they purport to represent. The massive waste of money on administration in hospitals, insurance companies, universities, and large corporations does not make these organizations improve patient outcomes, improve education of students, reduce medical costs to society, or improve products in the market that people rely on in their day to day lives. It's just a huge pile of burning money supporting the existence of roles that effectively detract from the overall productivity and quality of organizations. This isn't just DEI, by the way, it's all forms of unnecessary bureaucracy. It's one of the reasons why we need stronger anti-trust, because this is an inherent cancer to large organizations. The only solution for which is to have smaller organizations in the first place, so they can be razor focused on their actual core mission and not burning mountains of cash on administrative boondoggles.
refused_cov_vax 4y ago
>I rank the odds of you getting hurt by these specific discrimination practices aimed at you low, so stop mentioning them! No. Humans are not equal in aptitude. Neither are human groups. Either account for it, or don't, but be consistent.
netheril96 4y ago
> despite it having no effect on your life. How could it have no effect on our lives? It has effect when you compete against a diversity hire, it has effect when you have to work with a diversity hire, it has effect when your manager has to decide who to lay off when your coworker is a diversity hire.
- deleted 4y ago
  [deleted]
- John23832 4y ago
  Of all of the minorities in the world, even of the subset that may compete with you on for a position, you just CAN'T fathom that some of them may be better than you? That in even competition, this person, who just happens to be a (gender, racial, sexual orientation, ability, religous) minority is better than you at the position you're chose to apply for? Framing your competition as diversity hires (and contemplating the outsized concern that they have on your life) says more about than you think. You're the bottom of the barrel at what you do. "Diversity hires" don't compete at a high level. I for one know that if my competition wins, whether they are a minority or not, they do it on skill. I've elevated myself out of the concerns of competing with diversity hires, because I'm great at what I do. Level up.
  - netheril96 4y ago
    Tell me more about how Asian Americans have to have better grades than Whites, Blacks and Latinos to get into the same school because they are somehow worse.
    - John23832 4y ago
      Because amongst similarly qualified candidates we are THEN allowed to differentiate. It's the same reason you may pursue extracurricular and then put them on your college resume. Differentiation. Where's your crocodile tears for Vietnamese kid from south central (where the Vietnamese in America are on the lower end of the economic scale) who is admitted to Harvard instead of a Chinese, Korean, Japanese, or Indian kid from a well to do family? Lets segment Asian Americans and see how you feel. When opportunity is equally earned, we can then look to representation. Your argument is just an attempt to claim all spoils.
elektrontamer 4y ago
It does have an effect on his life if the group he belongs to isn't a "diverse" one. I say this as someone who would probably be considered "diverse", I'd like to be judged based on my merits not by diversity quotas the blue haired gestapo has dictated.
- ineedasername 4y ago
  >blue haired I don't understand this reference. What does blue hair (assuming metaphorical and not literal?) mean in this context?
  - elektrontamer 4y ago
    Maybe it's just another way for them to revolt against society, or they just really like the way it looks. I don't really know why but dying their hair in some outlandish color is pretty popular with that crowd. I'm not against it by the way, it looks nice when done well.
  - teh64 4y ago
    [dead]
  - UncleMeat 4y ago
    People that care about these topics are often slandered as "women with dyed hair." It is a way of creating an outgroup.
  - occamsrazorwit 4y ago
    It's a literal meaning referring to the idea of a secret ruling class of leftist women in society. They're assumed to have all this societal influence and control ("blue-haired gestapo") despite no actual leaders resembling this. I feel like the burden of proof is pretty high for claims like this.
  - MandieD 4y ago
    Amusingly enough, “blue hairs” has long been slang for elderly women - a lot of old women used to put a bit of bluing in their yellowish grey hair to make it look whiter/more silvery, and some of them overdid it a bit at times. What’s bluing? A non-permanent blue dye that used to be used when rinsing white shirts to make them look less yellowed. It’s still sold, but I don’t know anyone under 60 who still buys it. Amused by this shift in meaning, mostly because I’m now the female equivalent of a “grey beard” in tech, old enough to have experienced the Dotcom bust - there is a fair bit of silver in my hair, and I can’t be bothered to cover it. “Grey bun”?
mbesto 4y ago
I think this sentiment comes from Universities (which do have cases of bloated diversity groups) and then that sentiment is passed on to the idea corporations, which to your point are a drop in the ocean in terms of overall costs.

prakhar897 4y ago

A few years ago, I built an exact replica of a Saas product I saw online and priced it 1/3 theirs. The actual founder went mad and started a smear campaign. Lucky for him, Workload at my regular job picked up and I abandoned the project, but this highlighted the weak moats of most of these products. and this is the main reason most companies overhire. It's so that engineers are less inclined to go home and build their own competitor.

simmerup 4y ago
The other way to view is that even though you could undercut that business by two thirds, you didn’t make enough profit to make it worth pursuing over your day job. So maybe you were selling it far too cheap after all.
- prakhar897 4y ago
  I would've made significant more than my day job just by subscriptions (not counting share value). I had just joined workforce and leaving it so early didn't seem right to me.
FlyingSnake 4y ago
For most of these companies sales and marketing is the moat. Edit: curious to know what was the SaaS that got rattled by your fun experiment.
- prakhar897 4y ago
  I'll dm u :)
simonswords82 4y ago
> and this is the main reason most companies overhire. It's so that engineers are less inclined to go home and build their own competitor. This is most definitely not true.
threadweaver34 4y ago
If hosting is cheap, I'd be tempted to put it out for free just to up the ante with the other company.

gcr 4y ago

This guy! Imagine thinking “diversity programs” are a significant cost center, as if their spend were comparable to real estate or employee compensation

jimbob45 4y ago
It's not really about the cost though, is it? If they were donating to the KKK or literally setting cash on fire, I doubt you'd have the same outlook. Wasted or misspent money is never something to overlook, particularly when you could have justified keeping a few more employees on if you'd just stopped setting money on fire.
- pjc50 4y ago
  Watch out for the PACs. https://www.protocol.com/tech-company-pacs-2019-2020 https://www.protocol.com/tech-company-pacs-2019-2020 (somewhere between donating to the KKK, setting it on fire, and using it for bribes). I wonder what a company that donates equally to both sides is trying to achieve, hmm?
  - jimbob45 4y ago
    I don't know if you're American or not but that's a common strategy to select higher quality candidates for your side whilst selecting the lowest possible quality candidate for the opposing side via the primary process. That said, that's not always the case and you could absolutely be right.
- minsc_and_boo 4y ago
  Companies in the top quartile for racial and ethnic diversity are 35 percent more likely to have financial returns above their respective national industry medians. Falsely equivocating spending on diversity programs to "donating to the KKK or literally setting cash on fire" is really telling. This monthly discussion comes up on HN and it's already turning into a dumpster fire.
  - it_citizen 4y ago

cutenewt 4y ago

I doubt it. It feels more like the end of an era. All the so called "cool" technologies from FAANG names in the last 15 years have lost its luster. There's a new set of companies that are ready to take over. The most obvious ones to fall to the wayside are the ones threatened by ChatGPT and TikTok. Who knew tech could be trendy?

mathverse 4y ago
That’s absolutely out of touch with reality. The owner of TikTok Bytedance was massively laying off people already. It is nowhere as profitable as any of the FAANGs. ChatGPT is nowhere a product that can pay for itself.