3 ms·

The sunk-cost fallacy is a brutal one. Better to cut your losses than throw good money after bad.

hasty_pudding 3y ago
Sunk cost doesn't necessarily mean good management. It actually means the opposite. Instead of management identifying a boondoggle ahead of time they got the company into a mess.
- lallysingh 3y ago
  It was MS buying LI and then wanting them on Azure. There's a huge Azure branding play here that - I'm guessing - drove this work. A distant second was some cost savings in the far future. The hit to Azure's brand for this is probably significant. Who was looking at a migration to Azure before who's now discouraged?
  - hasty_pudding 3y ago
    > was MS buying LI and then wanting them on Azure. LinkedIn's been extremely independent of Microsoft and still are just like GitHub and openAI. This was a 100% internal LinkedIn management decision.
    - deleted 3y ago
      [deleted]
    - lallysingh 3y ago
      Could LI have selected a competitor?
      - hasty_pudding 3y ago
        LI is a monopoly in professional social networking. there are no competitors
        lallysingh 3y ago
        I meant a competitor to Azure
        hasty_pudding 3y ago
        The only other option is their own internal stack. I cant imagin being owned by MS they would be allowed to use Google cloud.
- snowwrestler 3y ago
  This kind of sentiment always shows up after the fact but the hard part is actually knowing it ahead of time. Emphasis on knowing. I’m sure some people thought it was a bad idea ahead of time. But there are always people who think any new idea or big change is a bad idea. The reality is that anything significant has to be tried out, for real, to find out. That’s the premise behind proven useful decision frameworks like agile or MVP. And as the GP says: good management shows up when they read the attempt clearly and resist the sunk cost fallacy. Bad management sounds like “let’s never change anything” or “we’ve already come this far, we need to finish it no matter what.” And to a large enterprise, tens of millions of dollars is not an existential amount of money to lose on trying something significant. Big sports teams lose that much on bad player moves all the time. “We can’t ever waste money on trying new things” is a great way to sink deeper and deeper into whatever rut you happen to be in at the time.
  - hasty_pudding 3y ago
    > Emphasis on knowing Literally your primary job as an executive. Strategic knowledge and wisdom If wasting tens of million on a bullshit initiative isn't an example of bad management then literally nothing is. The only place these types of terrible managers can exist are too big to fail companies like LinkedIn and the Government where theres zero repercussions for poor management decisions because money keeps pouring it. In smaller leaner companies where money is actually important executives actually have to be good at their jobs. > "We can’t ever waste money on trying new things" There's a difference between a good strategic decision and starting a "facebook for pets". Some ideas are terrible at the outset. And executives whole reason for existence is to make this determination. Blueshift was an objectively terrible decision and whoever made that decision is objectively bad at their jobs.

Sunk cost doesn't necessarily mean good management. It actually means the opposite. Instead of management identifying a boondoggle ahead of time they got the company into a mess.

lallysingh 3y ago
It was MS buying LI and then wanting them on Azure. There's a huge Azure branding play here that - I'm guessing - drove this work. A distant second was some cost savings in the far future. The hit to Azure's brand for this is probably significant. Who was looking at a migration to Azure before who's now discouraged?
- hasty_pudding 3y ago
  > was MS buying LI and then wanting them on Azure. LinkedIn's been extremely independent of Microsoft and still are just like GitHub and openAI. This was a 100% internal LinkedIn management decision.
  - deleted 3y ago
    [deleted]
  - lallysingh 3y ago
    Could LI have selected a competitor?
    - hasty_pudding 3y ago
      LI is a monopoly in professional social networking. there are no competitors
      - lallysingh 3y ago
        I meant a competitor to Azure
        hasty_pudding 3y ago
        The only other option is their own internal stack. I cant imagin being owned by MS they would be allowed to use Google cloud.
snowwrestler 3y ago
This kind of sentiment always shows up after the fact but the hard part is actually knowing it ahead of time. Emphasis on knowing. I’m sure some people thought it was a bad idea ahead of time. But there are always people who think any new idea or big change is a bad idea. The reality is that anything significant has to be tried out, for real, to find out. That’s the premise behind proven useful decision frameworks like agile or MVP. And as the GP says: good management shows up when they read the attempt clearly and resist the sunk cost fallacy. Bad management sounds like “let’s never change anything” or “we’ve already come this far, we need to finish it no matter what.” And to a large enterprise, tens of millions of dollars is not an existential amount of money to lose on trying something significant. Big sports teams lose that much on bad player moves all the time. “We can’t ever waste money on trying new things” is a great way to sink deeper and deeper into whatever rut you happen to be in at the time.
- hasty_pudding 3y ago
  > Emphasis on knowing Literally your primary job as an executive. Strategic knowledge and wisdom If wasting tens of million on a bullshit initiative isn't an example of bad management then literally nothing is. The only place these types of terrible managers can exist are too big to fail companies like LinkedIn and the Government where theres zero repercussions for poor management decisions because money keeps pouring it. In smaller leaner companies where money is actually important executives actually have to be good at their jobs. > "We can’t ever waste money on trying new things" There's a difference between a good strategic decision and starting a "facebook for pets". Some ideas are terrible at the outset. And executives whole reason for existence is to make this determination. Blueshift was an objectively terrible decision and whoever made that decision is objectively bad at their jobs.