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Comment by qjz | Hacker News Reader

In a startup, every expense is potentially a total loss, whether it's for a computer, a soda or a consulting fee. But when a business establishes a revenue stream that is insufficient to cover expenses and generate a profit, it has to differentiate between essentials and luxuries. Free soda will always be considered a luxury, whether or not it is a cost effective employee incentive.

Personally, I hate working in places with these kind of perks. I think they're abused by both management and employees. If your salary isn't enough to cover your personal needs, free soda doesn't solve the underlying problem.

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If a company is not making profits, it will hardly make a difference whether or not they're giving away soda. The larger a company gets, the more inefficient it becomes. A single unproductive employee is a much larger money leak than free snacks.

Not spending on soda gives them what? 3 more hours of runway before going out of business?

The crucial point here is that every minute management and/or engineers are thinking about soda, is a minute wasted. A classical case of "penny-wise, pound foolish".

engineers are thinking about soda, is a minute wasted

This probably the most often forgotten argument in favor of freebie snacks: time/attention saving.

A good engineer can easily cost a company $1/minute (and be worth much more). Even if going out to ones car to grab some change takes 2 minutes, that $.50 soda just got a 400% markup. Actually having otherwise productive employees think about this as an issue is an even greater waste of talent.

In a large enough company, though, the ratio of dead weight to productive people, can be high enough that charging for soda isn't a false economy.

A former boss of mine once said that he wasn't buying us a coffee machine so that we'd have an excuse to get out of the building and go for a walk. So much good high-quality thinking is done when you're walking instead of sitting in front of a computer.

(It helped that there were three truly excellent cafes and a bunch of so-so ones within walking distance; this wouldn't work in, say, Silicon Valley.)

I'd say there are many places (downtown Mountain View, Palo Alto, and Sunnyvale) where this would work fine, even without a car.

Notwithstanding my original comment, I make a point of leaving for lunch, even if there's food paid for by the company, including if I partake of the food itself. The break is important.

However, for some things, like an occasional small snack or a bit of caffeine-sugar water, it would be both a waste of time and of money to go out. Arguably, fiddling with a "free" coffee machine is also time-wasting.

For some, the severity of the interruption is more significant than the length of time or quantity of money involved. The variance in working style makes any one-size-fits-all policy questionable.

If your former boss made it very easy to get reimbursed for those trips out for coffee, his reasoning would carry more weight.

Where was this job located?

We're talking about soda, but in a culture ingrained with perks, there's no limit to waste, especially as you move up the ladder. In hard times, it sucks to see your boss fly first class instead of coach, take a limo instead of a cab, consider illegal parking tickets a necessary business expense, and all other kinds of excesses. If the business can't afford luxuries, things like free soda can be just one symptom of a far greater problem. In good times, go ahead and splurge. But even then it can create compensation inequities due to abuse and feelings of entitlement.

"The larger a company gets, the more inefficient it becomes."

Do you have evidence for this assertion? I thought it was fairly well established that most large companies in mature industries are usually quite efficient due to various economies of scale.

Economic theory claims that the size of companies are set by the point when the overhead of internal mismanagement equals the overhead of constant negotiations between independent units. Therefore larger companies are internally less efficient than small companies, but exist because they represent a more efficient way of doing business.

(That said, large companies have a tendency to remain more efficient than the alternative by putting up artificial barriers to entry. For example the difficulty of negotiating access to patents makes large companies more efficient than possible competition, but the extra efficiency is due to solving an artificial problem.)

Couldn't have said it better.

Large companies have economies of scale in the operational/business sense, but they're terribly inefficient in the people sense.

That's probably true for manufacturing, but not for knowledge work like software. The Mythical Man-Month covers this fairly well.

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