3 ms·

It is entirely possible to work in tech for a company that does not make any profit for years but still receive big pay checks. I used to work for a company tha

It is entirely possible to work in tech for a company that does not make any profit for years but still receive big pay checks. I used to work for a company that is at a loss, but we have the "potential" to turn around and i still get paid quite well. How does that work?

medellin 3y ago
Normally by convincing VCs that the company is worth the money of your inflated salaries and after X years they will make it back. Not many people out here are investing out of good will.
crazygringo 3y ago
It works because supply and demand in the labor market has nothing whatsoever to do with the profitability of a firm. It's like how the price of strawberries this week in the supermarket is determined by the supply of strawberries, demand from customers, and the price at neighboring supermarkets. It's not set by anything to do with the supermarket's profitability.
- zkzjauahsva71 3y ago
  I mean yes and no. If the supermarket never sells it because they can't make a profit (and it's not in enough demand to be a loss leader that brings people in), then the supermarket won't sell them, driving down demand to the supplier. If that exists for one supermarket it likely exists for others driving down the demand more (even if said demand would have otherwise remained high) . You see this dynamic in markets fairly frequently and the profitable goods and services will be promoted more heavily. One can get philosophical about what is supply and what is demand, but middle man profitablity is a factor in those things as they're at once a customer and a seller. TLDR supermarket profitablity definitely drives pricing as well. Just another component.
  - LawTalkingGuy 3y ago
    >> supply and demand in the labor market has nothing whatsoever to do with the profitability of a firm > [supermarkets] All supermarkets have to pay the same price to buy strawberries, regardless of their individual profitability.

medellin 3y ago

Normally by convincing VCs that the company is worth the money of your inflated salaries and after X years they will make it back. Not many people out here are investing out of good will.

crazygringo 3y ago

It works because supply and demand in the labor market has nothing whatsoever to do with the profitability of a firm. It's like how the price of strawberries this week in the supermarket is determined by the supply of strawberries, demand from customers, and the price at neighboring supermarkets. It's not set by anything to do with the supermarket's profitability.

zkzjauahsva71 3y ago
I mean yes and no. If the supermarket never sells it because they can't make a profit (and it's not in enough demand to be a loss leader that brings people in), then the supermarket won't sell them, driving down demand to the supplier. If that exists for one supermarket it likely exists for others driving down the demand more (even if said demand would have otherwise remained high) . You see this dynamic in markets fairly frequently and the profitable goods and services will be promoted more heavily. One can get philosophical about what is supply and what is demand, but middle man profitablity is a factor in those things as they're at once a customer and a seller. TLDR supermarket profitablity definitely drives pricing as well. Just another component.
- LawTalkingGuy 3y ago
  >> supply and demand in the labor market has nothing whatsoever to do with the profitability of a firm > [supermarkets] All supermarkets have to pay the same price to buy strawberries, regardless of their individual profitability.