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If you run a coffee shop, you would be the buyer in the relationship as it relates to this discussion. A better analogy might that you surveyed Starbucks to fi
by randomdata 14y ago
If you run a coffee shop, you would be the buyer in the relationship as it relates to this discussion.
A better analogy might that you surveyed Starbucks to find out how much they spend for their coffee beans. You then build the expectation that you should also be able to buy coffee beans for the same price as Starbucks. Of course, you can't, because you are small and don't buy enough beans to get Starbuck's volume price.
So, applying it to the topic at hand: Maybe Facebook can pay an engineer $150K to keep them happy because of the prestige and perks of working there, but your small company is going to have to pay $200K to get the same talent because, like in the coffee bean example, you are nobody special and do not have access to the benefits of being a "big deal".
- wisty 14y agoNo, it's not about economies of scale. It's about non-monetary costs. What I'm saying (using your analogy) is that Starbucks actually works hard to get good suppliers. If you open a coffeeshop and use beans from the local supermarket (hoping to pay market price - it's a market, right?, of course you pay a lot more and get worse quality than if you spend some time tracking down a good supplier.