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To add to the concept, how a tech company today makes money is very different than in the past. Profit doesnt matter anymore. It is all speculation against th

To add to the concept, how a tech company today makes money is very different than in the past. Profit doesnt matter anymore. It is all speculation against the dream of future profits once a tech company dominates a market. Money people will pay the kids because in faint hope of being on the ground floor of the next facebook or microsoft. But with entrenched companies now dominating tech, nobody will be the next microsoft. Investors are starting to realize those days are gone. Tech companies will be started and many will succeed, but now must actually compete with each other, often in courtrooms, to justify why they should be allowed into existing markets. Look at nokia. A few decades ago anyone with a billion dollars could start making cellphones. Good luck with that today. You would need a hundred billion, and a few decades of IP lawyering, before being allowed to compete with the likes of apple/samsung. If your device has a touch screen and connects to the internet, you will suffer innumerable patent issues.

brigadier132 3y ago
> Profit doesnt matter anymore Uh, you might have not been paying attention to it but profit does matter now. If you look out the window you can see all the startups doing mass layoffs or going out of business.
infecto 3y ago
Profit has always mattered. The only change in attitude was because of historically low rates, it was easier to get more funding. Cheap rates = cheap money, investors are more willing to part ways.
- jt2190 3y ago
  Yes, cheap money literally means “profitable next year” becomes “profitable _someday_”. To people who have only been in the tech industry for the last decade this feels like “profits don’t matter” because it’s never been “someday” in their entire careers, but now with interest rates back up “someday” is coming very fast at many companies (and has maybe already arrived at some).
javcasas 3y ago
> Profit doesnt matter anymore. It is all speculation against the dream of future profits once a tech company <fill stuff here>. Oh, this time is soooo different to the dotcom crash, where it was speculation on companies, where profits didn't matter because it was the dream of future profits once a tech company <fill other stuff here>.
- EVa5I7bHFq9mnYK 3y ago
  I remember large celebrations of a first ever profit eked out by an internet company, namely Yahoo.
BlueTemplar 3y ago
That's what IBM thought. And this doesn't even take into account the possibility of these companies getting forcibly shut down / competitors coming in from outside. The only question is how long will this take ?
cmrdporcupine 3y ago
> Profit doesnt matter anymore. Until it does. Also, Google etc clearly are profitable. Insanely profitable. The question is... how? I think people are right to question whether the majority of the employees are engaged in work which ensures this profitability. But that's not the same as saying there's no profit. It's all built on an edifice of advertising, which feels like a bit of a sandcastle to me. But I am also of the .com generation that saw the whole beach wash out into the ocean once already, and never understood how the advertising thing actually ended up yielding profits, and was initially quite pessimistic about the Google IPO (though was happy to take money from them by working there for a decade). I've seen the CPMs and the CPCs from the inside. I don't get it. I worked on ad servers and in realtime ad bidding. But I still don't understand why ads make money.
- gosub100 3y ago
  > But I still don't understand why ads make money. total guess here, but instead of thinking of an ad as something that actually converts someone into a paying customer, maybe it's more about buying "mental real estate"? If nobody knows your brand, you have almost no sales. If you're at least in the neighborhood, then by pigeonhole principle, at least some customers will stop at your property. So maybe ads are a sort of dilemma that (with very few exceptions), your business must burn money on advertising just to stay in business?
  - cmrdporcupine 3y ago
    Absolutely, I get this impressions-as-marketing thing. But this also seems remarkably vulnerable to recession economics. Back when I worked in ads, the line was always that digital ads budget were still a fraction of what was being spent in traditional media, and so there was huge room to grow. I'm kinda guessing this is no longer the case.
- rwmj 3y ago
  I worked on the other end of this as a buyer of Google Ads for some large travel companies in the UK. For all the craziness and disfunction that I saw at those companies[1], fundamentally the adverts did end up selling holidays to customers, and that was why they spent the money with Google. [1] https://news.ycombinator.com/item?id=21046731 https://news.ycombinator.com/item?id=21046731
packetlost 3y ago
> But with entrenched companies now dominating tech, nobody will be the next microsoft. Idk, wasn't this the sentiment 30-40 years ago towards IBM?
kakwa_ 3y ago
> A few decades ago anyone with a billion dollars could start making cellphones Did you mixed-up million and billion? A billion dollar is a gigantic pill of money. This feel a bit like saying "anyone with a British crown on his head can reign over the UK". Also, looking at Fairphone, they operate with a fairly reasonable budget: all revenue, including phone sells in 2022 are around $60M, and if we exclude production, ~$17M are needed to pay for product development, marketing, support and all other expenses for a year. At 2 years to create a phone, that's ~$30M.

brigadier132 3y ago

> Profit doesnt matter anymore Uh, you might have not been paying attention to it but profit does matter now. If you look out the window you can see all the startups doing mass layoffs or going out of business.

infecto 3y ago

Profit has always mattered. The only change in attitude was because of historically low rates, it was easier to get more funding. Cheap rates = cheap money, investors are more willing to part ways.

jt2190 3y ago
Yes, cheap money literally means “profitable next year” becomes “profitable _someday_”. To people who have only been in the tech industry for the last decade this feels like “profits don’t matter” because it’s never been “someday” in their entire careers, but now with interest rates back up “someday” is coming very fast at many companies (and has maybe already arrived at some).

javcasas 3y ago

> Profit doesnt matter anymore. It is all speculation against the dream of future profits once a tech company <fill stuff here>. Oh, this time is soooo different to the dotcom crash, where it was speculation on companies, where profits didn't matter because it was the dream of future profits once a tech company <fill other stuff here>.

EVa5I7bHFq9mnYK 3y ago
I remember large celebrations of a first ever profit eked out by an internet company, namely Yahoo.

BlueTemplar 3y ago

That's what IBM thought. And this doesn't even take into account the possibility of these companies getting forcibly shut down / competitors coming in from outside. The only question is how long will this take ?

cmrdporcupine 3y ago

> Profit doesnt matter anymore. Until it does. Also, Google etc clearly are profitable. Insanely profitable. The question is... how? I think people are right to question whether the majority of the employees are engaged in work which ensures this profitability. But that's not the same as saying there's no profit. It's all built on an edifice of advertising, which feels like a bit of a sandcastle to me. But I am also of the .com generation that saw the whole beach wash out into the ocean once already, and never understood how the advertising thing actually ended up yielding profits, and was initially quite pessimistic about the Google IPO (though was happy to take money from them by working there for a decade). I've seen the CPMs and the CPCs from the inside. I don't get it. I worked on ad servers and in realtime ad bidding. But I still don't understand why ads make money.

gosub100 3y ago
> But I still don't understand why ads make money. total guess here, but instead of thinking of an ad as something that actually converts someone into a paying customer, maybe it's more about buying "mental real estate"? If nobody knows your brand, you have almost no sales. If you're at least in the neighborhood, then by pigeonhole principle, at least some customers will stop at your property. So maybe ads are a sort of dilemma that (with very few exceptions), your business must burn money on advertising just to stay in business?
- cmrdporcupine 3y ago
  Absolutely, I get this impressions-as-marketing thing. But this also seems remarkably vulnerable to recession economics. Back when I worked in ads, the line was always that digital ads budget were still a fraction of what was being spent in traditional media, and so there was huge room to grow. I'm kinda guessing this is no longer the case.
rwmj 3y ago
I worked on the other end of this as a buyer of Google Ads for some large travel companies in the UK. For all the craziness and disfunction that I saw at those companies[1], fundamentally the adverts did end up selling holidays to customers, and that was why they spent the money with Google. [1] https://news.ycombinator.com/item?id=21046731 https://news.ycombinator.com/item?id=21046731

packetlost 3y ago

> But with entrenched companies now dominating tech, nobody will be the next microsoft. Idk, wasn't this the sentiment 30-40 years ago towards IBM?

kakwa_ 3y ago

> A few decades ago anyone with a billion dollars could start making cellphones Did you mixed-up million and billion? A billion dollar is a gigantic pill of money. This feel a bit like saying "anyone with a British crown on his head can reign over the UK". Also, looking at Fairphone, they operate with a fairly reasonable budget: all revenue, including phone sells in 2022 are around $60M, and if we exclude production, ~$17M are needed to pay for product development, marketing, support and all other expenses for a year. At 2 years to create a phone, that's ~$30M.