More than a decade ago I was hanging out with the CEO and a few engineers from a startup I was working at. I don’t remember why but we started estimating what p

More than a decade ago I was hanging out with the CEO and a few engineers from a startup I was working at. I don’t remember why but we started estimating what portion of Google’s revenue came from advertising. We settled on our estimates and then looked it up, and were surprised to find it was something wild like 95% - I don’t remember the exact number but essentially it was all of their revenue. We realized they could run every other Google service at a loss indefinitely, and started theorizing what this could mean. “Eventually, Email = Gmail” was one conclusion: their email offering was not just “the hardware resources of a paid product (gigabytes of storage, etc) for free”, but also “the feature development velocity of a paid product (teams of full-time well-paid engineers) for free”. So essentially, other email providers wouldn’t last very long being undercut so heavily, and Google’s ad revenue allowed them to undercut forever. One of us pointed out that you might not even get other email providers in the first place, since Google could just hire all the email developers to work on Gmail. Even if they didn’t add any value - even if they subtracted value - as long as AdWords kept ticking along Google could still afford to keep them on payroll at a higher rate than any competitor could offer. Our sobering conclusion was that Google could be this gigantic elephant sitting on top of dozens of different product markets, squeezing them all out by undercutting revenue streams and hiring all the talent - an elephant that would stay perched there based mostly on whether people kept buying ads elsewhere, and based not at all on whether they did a good job on the product or not. Things didn’t quite turn out like we worried (it became FANG/FAANG instead of Google, for instance) and it seems like our pessimism was somewhat unwarranted, although writing it out now, parts of it do certainly ring true. But! One thing we absolutely didn’t expect was that Google/FAANG would one day voluntarily decide to shed tens of thousands of “captive” developers! Many of these devs were doing no work, busywork, or redundant work, so these layoffs represent a huge and very real injection of talent back into the tech sphere (e.g. they were building a redesign of Gmail, but are now building the first design of a new product). I know there’s an impression that many of the layoffs are “people in tech” non-developers (talents in their own right, to be sure, but somewhat less relevant for engineer-hungry startups), but many of the layoffs are developers, and they will find work building new competitors instead of rebuilding/maintaining existing market leaders. Something to be happy about at the birds-eye view of tech progress, even while the layoffs themselves surely suck for the individuals affected.