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> Staffing is the “single biggest cost” after fees paid to app distribution platforms like Apple Inc. and Alphabet Inc.’s Google, according to Arison. This is
by wvenable 3y ago
> Staffing is the “single biggest cost” after fees paid to app distribution platforms like Apple Inc. and Alphabet Inc.’s Google, according to Arison.
This is a hilarious quote. It's a software company! What other major costs are there besides the staff to make and manage the software? I think I even find it a little disturbing that fees paid to Apple and Google are higher than salary paid to staff.
- ghaff 3y agoYeah, it's pretty normal that software companies, perhaps with the exception of those with large datacenter footprints but probably even them, have people as their largest cost.
- nevir 3y agoTo us in the industry this is pretty obvious—but it's surprising to folks outside of tech.
- deleted 3y ago[deleted]
- rrrrrrrrrrrryan 3y agoMany (most?) technology companies manufacture and sell physical products, and have dramatically different cost structures than a pure software company like Grindr.
- kornhole 3y agoI wonder how much money Apple and Google make per hookup. I think there is a name for this kind of business.
- malux85 3y agoGiven the number of hookups, it’s probably fractions of cents ;)
- capitalsigma 3y ago"matchmaking"
- formerly_proven 3y agoLots with Tinder, little for Grindr.
- bragr 3y agoProbably more than you'd expect. They have two levels of subscriptions [1][2]. XTRA is $19.99 per month and Unlimited is $39.99 so potentially the revenue per hookup could be pretty high, at least as far as per user app revenue goes, assuming a reasonable subscription rate. [1] https://help.grindr.com/hc/en-us/articles/1500008656241-Grindr-XTRA https://help.grindr.com/hc/en-us/articles/1500008656241-Grin... [2] https://help.grindr.com/hc/en-us/articles/1500008656741-Grindr-Unlimited- https://help.grindr.com/hc/en-us/articles/1500008656741-Grin...
- martinjacobd 3y agoYeah but you don't have to have either of those memberships and in big cities, at least, it's easy enough to get a hookup without them
- jliptzin 3y agoAnd how would that number compare to a bar or restaurant?
- throaway920181 3y agoThat phrasing is obnoxious. Say it like it is - it's the "second biggest cost."
- SamBam 3y agoPaying my cat sitter is totally out of control! It's my single biggest cost, after my mortgage, food, utilities, travel, clothing, internet, entertainment, drugs, coffee, gas, and succulent plant collection.
- jmspring 3y agoA good cat sitter is hard to find. The wife and I have told ours, if we move, she is moving with us.
- sbate1987 3y ago[dead]
- hgomersall 3y agoIs this a serious reply? I mean, don't cats just ignore everyone? What do cat sitters do apart from spoon food from the packet into the bowl, replenish the water and occasionally tickle the cats tummy?
- SketchySeaBeast 3y agoCats are pretty sensitive to changes in their environment. They have a hard time with change, it's just if you're not paying attention it's hard to tell until they stop eating and you have to take them to the vet.
- toolz 3y agoI imagine it depends on the cat. I've moved cities and states with a few cats a few times and they were back to mostly normal within a couple days and only stopped eating out of stress for maybe a day. Takes them weeks to completely relax, but I wouldn't say that puts them in a relatively "sensitive" category when compared to other animals.
- JackFr 3y ago> It's a software company! But it's not actually a software company.
- deleted 3y ago[deleted]
- mynameisash 3y agoWhat are they? Edit: as the saying goes, people don't want a drill, they want a hole. So if Grindr isn't a software company but a matchmaker that happens to write software (or CaaS/PaaS), then I don't know who truly is a software company. Microsoft is a productivity company, Amazon is a retailer & B2B services company, Google is an advertiser, and so on.
- readyplayernull 3y agoCaaS
- throaway920181 3y agoPaaS
- mc32 3y agoAre Craigslist or Ebay software companies? They obviously need software to run, but like Google who are mainly in the ad business, these people are in the matchmaking/social business not software business --unless they were to sell their software to other parties who were user/client-facing.
- TheCleric 3y agoI think of it like this: would the business exist without the software they wrote in house to facilitate the business? If the business ceases to exist without the software: it's a software company.
- 3y ago
- ThrowawayTestr 3y ago> I think I even find it a little disturbing that fees paid to Apple and Google are higher than salary paid to staff. Well it's 30% of their revenue right off the top.
- bombcar 3y agoWhich implies that staffing is less than 30% which means .... where is the other 40% going?!?!? Edit: unless advertising spend on the platforms is being counted ...
- philipov 3y agoOffice space costs /s
- hdjjhhvvhga 3y agoThat would be hilarious, actually - but impossible, because it would make it the second biggest cost.
- bombcar 3y agoIt would only need to be 29% or so, and 11% "other".
- core-utility 3y agoYou mean the first biggest cost, if you don't account for the actual first biggest cost. /s
- piece_of_mind 3y agoA lot of it is AWS spend.
- newaccount74 3y agoDoes "staffing" include contractors? That could be another big chunk.
- Waterluvian 3y agoSometimes when I'm in a weird place, I keep "cleaning up" some piece of software until there's basically nothing left. I kinda fixate and forget the entire point of what I'm trying to do. Running a company is the single biggest cost to running a company.
- ska 3y ago> I think I even find it a little disturbing that fees paid to Isn't it pretty typical in many (most?) industries that dev cost is not the dominant part? Even pretty "pure" development like a movie or a game can have a bigger marketing budget than entire production cost, let alone salary only. Other industries R&D is often kept to 10-15% of costs (M&A complicates this).
- chinchilla2020 3y agoTech is special because the fixed costs are extremely low compared to other industries. In manufacturing you have to make those massive interest payments on capital every month, which dwarf your labor costs by a wide margin.
- hollerith 3y agoFixed cost in accounting means all the costs except for the cost of making the next sale, which is called marginal cost or variable cost; so for example the marginal cost of a sale of IntelliJ is the cost of accepting payment, delivering the software somehow (i.e., mostly server costs these days) and support costs. Marginal cost of a car in contrast is the cost of the materials that go into the car plus the cost of any parts or subassemblies not made by the car company. So, your "tech is special because the fixed costs are extremely low compared" is false. Programmer salaries are fixed costs because if you suddenly start selling twice as many licenses each month, there's no need to hire more programmers or have your existing programmer work twice as much.
- marstall 3y agomarketing, transaction fees, hosting fees, licensing/saas fees, outside legal/consulting, rent, insurance, marketing, marketing, marketing.
- asveikau 3y ago> What other major costs are there besides the staff to make and manage the software? Server costs don't seem to be mentioned anywhere here?
- maerF0x0 3y agoUnless a company is doing a computationally expensive thing (like deep learning, or big data crunching etc) or the domain is commoditized/low value then the opex should be an inconsequential amount, and only at massive scale does it become worth optimizing (relative to the cost of engineer's time to do that optimization). Optimizing for runtime speed can be a product advantage though, but in my experiences are usually unimportant so long as it's not absurdly inefficient.
- asveikau 3y agoI don't think that has much bearing on my question of ranking server costs with other costs (which I don't know the answer to, I'm just saying it's a cost among all the others cited). Further, I think their app is pretty popular so it does require some of that optimized engineering on the server side.
- dwaltrip 3y agoStaffing costs >> server costs, generally, is my understanding.
- asveikau 3y agoI'm not even implying the opposite, I'm merely saying it is a cost.
- dwaltrip 3y ago>> Unless a company is doing a computationally expensive thing [...] then the opex should be an inconsequential amount > I don't think that has much bearing on my question of ranking server costs with other costs Take another look at the comment thread. It seems to me there is some sort of miscommunication or misunderstanding.
- mrguyorama 3y agoAmerican Railroad ideology is that the most "efficient" railroad owns no track and runs no trains. American businesses believe they should be able to spend zero money and yet still make all the profit.
- meitham 3y agoWelcome to synthetic financial products trading!
- K7PJP 3y agoYes, the railroad industry literally made this argument last year when (successfully) appealing to the Biden administration to block a railworkers strike. > During hearings before the board on wages … the railroads argued that labor from railroad workers does not contribute to their profits. “The Carriers maintain that capital investment and risk are the reasons for their profits, not any contributions from labor,” the PEB report said. “The Carriers assert that since employees have been fairly and adequately paid for their efforts… then they have no claim to share in the [profits].” https://www.wsws.org/en/articles/2022/08/25/rail-a25.html https://www.wsws.org/en/articles/2022/08/25/rail-a25.html
- pdonis 3y ago> the railroad industry literally made this argument No, they didn't. The article you cite misdescribes the situation (for ideological reasons that are old hat to anyone familiar with the history of socialism). The railroads didn't argue that they should be able to spend zero money and make all the profits. They argued that they were paying money: they were paying employees fairly and adequately for their efforts. And having done that, they, as the owners of the company, took the profits that were left after meeting all company expenses, including paying labor fairly and adequately for its efforts. That's literally what owning a company means. An employee is not an owner. Profits are what the owners get after paying their employees. A much better argument against the railroads in this case is that the railroad routes that their companies have exclusive rights to are granted by government regulation, not in a free market, so the revenues that are available to them, and which determine what their profits are after paying their employees, are not due to their sound business acumen, but to their ability to buy government regulations that favor them. But the article you cite does not say that (again, for well known ideological reasons).
- sneak 3y agoApple IAPs are highway robbery. They charge ~10x the industry standard for card processing (30% vs 3%) and they only get away with it because sideloading competitors is impossible.