Sergey Brin: The Facebook phenomenon is a problem (2007)
twitter.com
twitter.com
[1] https://www.reuters.com/article/us-apple-google-settlement-i...
Incidentally, the decline of their platform is one of the reasons why I believe it is unlikely there will ever be a serious Meta third party App Store competitor on iOS- Facebook isn't very good at managing a developer community.
https://about.fb.com/news/2021/06/f8-refresh-developer-confe...
im so glad i never even tried that one
It just wasn't worth it when a developer could reach people on FB with ads instead, and point to their mobile app, where you can attempt to fully capture the value of the customer rather than just rent them from FB. Forgive me for the business speak there, I'm no longer in that space thank the stars.
It probably helped their short term metrics but it really seems like this decision was terrible in the long term.
I and a lot of people I know began to disengage when Facebook mostly became people I didn’t know so well posting political crap.
True. But would more FarmVille spam in the feed have been any better?
I deactivated my account months ago, and would like to see Facebook just disappear. Facebook should not have a place in our future imo.
They were really jealous of twitter being the source of “trending” topics on news broadcasts and wanted that role, so they boosted links and news articles rather than updates from friends, they even experimented with making all posts public.
It’s like they don’t know that their strength was that you could connect with people you know and care about, but they wanted to be another “shouting in the wind” platform.
My guess is that Facebook realized that being a "shouting in the wind" platform is an excellent way to retain what I'd call the "low engagement" tail end of the distribution.
i.e. the explicit goal was to provide content for those without all that many actual friends on Facebook.
I look at Facebook now and it seems like the connect with friends part of it is very much secondary to just driving groups, marketplace, and all the parasocial paraphernalia of the modern internet.
Which is of course a very profitable thing to do if you're in the eyeball minutes business. All those features are after all, there for users 24/7. And don't rely on the vagaries of end user content creation.
There are a lot of factors that went into FB’s meteoric rise in the 2006-2014 range, but I think more than anything it was Sheryl telling the wage cartel that they could get fucked.
High-end Google hackers could walk across the street and TCO 2-5x more with negligible increase in risk.
The main factor was MySpace being a mess, something like Twitter is today but nobody bothered to get it right except Zuckerberg.
Sorry I don't speak English natively (and to make things worst, I'm Italian!!) and I'm not sure I was able to express my thoughts in a comprehensible way! Please feel free to rephrase if you can do it better then me! Thanks! ¯\_(ツ)_/¯
You did great. This comment was a pleasure to read!
it's correct to say: "to make things worse".
worse: one thing is worse than another.
worst: prepare for the worst - preparati al peggio.
I'm dating myself here, but back in the day, there used to be a weekly(?) strategy review that Google execs did, called a "GPS review" - I think it stood for Google Product Strategy review.
My guess is that a few 'misalignments' (exec speak for a review that went poorly) might make some key employees unhappy (e.g. their projects might get canceled) and that they might leave.
You say those times are gone, but have you seen what FAANG pays people now?
10% off anything on the site.
Capped at a maximum of $100 / year.
This is a discount that feels like they're going out of their way to spit in your face. What if you raised my annual pay by... $100? Who would notice or care?
Seriously? $100 per employee is almost too small to figure. Scale here. Amazon did $150b in quarterly revenue. QUARTERLY. it has 1.3m employees worldwide. $100 per employee is 0.001% of the quarters revenue.
It doesn't move the dial.
Did you mean that markup is about 10%?
I meant that Amazon profit is 10% of revenue.
On the other hand, Amazon operates Prime at a loss, since 2-day shipping is ridiculously expensive. It uses it as a way to get and hold on to new customers, but you don't exactly need to do that when the user is already working for Amazon. So offering that as a perk would end up costing the company more than $100/employee.
https://www.businessinsider.com/google-promises-employees-16...
As for that Googler- well, there were always a bunch of people there who had some or another circumstance that made them incompatible with the larger Google culture.
But I'm assuming he did great at the whiteboard interview! Being sarcastic but I've always been surprised how some really terrible personalities are hired because they aced the tech quizzes.
Might be worth a few cents for their advertising side-business, I dunno.
So they would have made WhatsApp work only with “Gmail” addresses instead - with Google Login and in a Chrome Desktop app only (of course) - and they’d have then shut it down after few years. Or people might have stopped using it before the shutdown.
15 years later, this is still a widespread problem everywhere. People don't capture the full value of their labor (which makes a sort of sense, given imperfect information and how risk is allocated), which leads to people not being incentivized to increase the value of their labor.
We've all heard stories about people being extra efficient and getting rewarded with raised expectations and maybe a paltry raise. If people were really incentivized to do their best work, I imagine we'd get a better world.
This is not a comprehensive description of capitalism but it is the low level idea. Obviously there is a distribution of real world behaviors.
It's not anchored in labor exploitation.
> The basic concept of capitalism is that there are capital owners, and they hire workers who use that capital to generate value. The capital owners receive all of that value and then pay the workers for their time.
These are both true.
As the person you're responding to said, capitalism is the philosophy that concentration of capital should be rewarded. It's that simple.
Whether the state or private magnates concentrate the capital and get rewarded for it is irrelevant.
By the way I got this from Richard Wolff. Here is his education history:
B.A. History magna cum laude Harvard 1963
M.A. Economics Stanford 1964
M.A. Economics Yale 1966
M.A. History Yale 1967
Ph.D. Economics Yale 1969
But did Mr. Wolff really say – "The basic concept of capitalism is that there are capital owners, and they hire workers who use that capital to generate value. The capital owners receive all of that value and then pay the workers for their time." – ? Where?
Then there would be no incentive for investment.
There's three people (or entities) in this: the one who makes the tool, the one who buys the tool, and the one who uses the tool. All of them need some of the rewards from the increased productivity that the tool empowers, otherwise we stop getting tools that let us be more productive, and we're all worse off. So you have to pay both the capitalists and the workers.
Now, you can argue that the pendulum has swung too far in the direction of the capitalists. That's a defensible position. But the answer is not to move to "the workers get 100% of the gains". That's going to leave everyone worse off, including the workers.
The CEOs of such companies get multi million dollar packages for leaving.
If the entire society had a similar level of appetite for risk, we'd see a different asset distribution in society.
Since most people are terribly averse to losing anything, they also shut down the perspective of winning big.
Imagine there is a lottery where for every 10 million tickets you buy you get one that is giving you 20 millions back.
No brainer, right? Except if you don’t have the 10 million to spare, buying lottery tickets instead of food doesn’t make sense.
Labor/job is your single lottery ticket.
Investors can afford to buy all tickets to make sure they win.
Applied another way, everyone in a given class of YC should share a bit of ownership with everyone else in their YC class, and then everyone of them is likely to end up a millionare.
I still wish that YC would provide some more concrete figures, and ideally include separate figures for first employees as well as founders.
From link: “Most of the returns have gone to a tiny minority of super-successes. The founders of AirBnB, Dropbox and Stripe are worth about US$7 billion, about 80% of all founders’ equity, although they account for 0.5% of the companies. Outside of the most successful companies, it was still possible to earn significant returns. 12% of companies from the first five years of Y Combinator are now worth US$40 million or more, and a further 10% have sold for US$5-40 million. The remainder probably earned little more than their (low) salaries.”.
Employees take on considerable risk by joining early startups, and they take on opportunity risk when working for other companies, as well.
An early employee risks their ability to house and feed themselves and their family, along with their ability to afford medical care or retirement, by working at a company that could fold or fire them at any moment. An investor might experience some capital loss they can write off at tax time.
I'd bet in most early stage startups nowadays developers are paid way more than the founders themselves. And they work way less hours, with way less stressful problems than the founders.
The difference in pay, hours dedicated and stress (along with damages to health and life in general) represents the founders' risk appetite for future earnings.
Employees are not at all open to bear this level of risk and they should not be compensated for not bearing this risk. Founders and investors deliver value to society by bearing higher risks. We have better and cheaper services as a result. They should be compensated accordingly, so we keep them motivated to continue servicing us in increasingly better ways.
I think it is primarily due to de-risking. You agree with your employer that the biggest percentage of your income will be fixed and independent of how much value the company produced (be it profits or share appreciation or whatever). This makes sense because your life has high fixed costs, and your cash-flow cannot allow for years when you make zero (or even a negative amount), even if in the next one you would make 5 times your current salary.
> which leads to people not being incentivized to increase the value of their labor.
Don't think this is necessarily true. I would love to walk into an apple orchard now and spend an hour picking if I could keep 25% of the apples.
This doesn't just make a sort of sense to me, it makes perfect sense.
People trade their labor at a lower rate for higher stability (less risk). The people who start companies, find capital, and distribute that capital in ways that increase the value of the company have taken on more risk (how significant varies case-by-case and usually is a natural market cap ceiling to the total value the owners can extract ahead of employees).
If the company I work at gives me shares in that company, I want the company to pay less for my labor (and everyone's) if my belief is that collectively all employees output will accelerate my own wealth creation when I sell my shares in the company. The share becomes a transitive store of value I believe my own labor alone will never be able to keep up with, and I want to make sure the value it's accumulating is not diminished because the company is paying out the full capital value of everyone's labor. Then there would be very little incentive for me to take the shares in the first place, and, honestly, very little incentive for anyone to start a company (why take on that risk if there's no payout in excess of just joining another company?).
The % of comp in RSU raises as you get promoted to higher levels, where you (theoretically at least) actually have more impact on the success of the company.
RSUs go a long way, but don't totally align the incentives.
At a company of, say, 100,000 employees, how much my individual contribution will makes the stock price go up is debatable, but getting more of those RSUs will materially boost my TC, where at upper levels the majority of TC is stock-based.
Even considering the risk-neutral compensation, this is not how much employment ought to be discounted. Especially not in the U.S. where many states have at-will laws.
Bezos' risk of spending other people's money rewarded him with billions.
Warehouse workers risk of personal injury are rewarded with starvation wages.
Assuming wages are a function of the free market. And the less mobile people are, the less job-applicants exist, and the higher wages need to be to poach. Incentivizing for good work might have diminishing returns after a certain point.
Why would you expect people to capture the full value of their labor?
Imagine you operate a business. You do the math and determine that hiring a new employee will cost you $100K/year, but it will bring in $100K/year of revenue. In other words, the employee would capture the full value that they create (assuming nothing goes wrong).
Do you hire that employee? Of course not. It doesn't make any business sense. It's more work for you, more risk for the company, and most importantly it provide $0 financial value to the company. It's an easy no.
Now if you can hire someone for $100K and their addition will bring in $150K, that's a different story.
You can't expect to capture the full value of your labor as an employee. However, you're also free from capturing the full value of the losses you might create. If you fail to ship your objectives or you accidentally drop the main DB and cost the company $100K, you don't receive a bill for the negative value you created. You get to keep your paychecks.
> which leads to people not being incentivized to increase the value of their labor.
This doesn't make sense at all. People increase the value of their labor all the time because it leads to more and better opportunities and gives more leverage in future negotiations.
You don't have to capture the "full value" of your labor to have an incentive to improve.
That's what the model predicts, but it's unfortunately not how companies beyond a certain size work in practice. Hiring decisions are not made by the business owner to increase profit, but middle-ranking members of the hierarchy who have their own parallel goals.
Businesses can, and do, regularly hire employees that bring in zero or negative value. Often, these people will make up more than 50% of the company by headcount, and the only reason the company still turns a profit is because their existence is subsidised by a small minority of hyper-productive people.
There are people who take on big, flashy projects that generate a lot of measurable value, and there are people who do the boring stuff that needs to be done too. Without one, you don’t get the other.
Or the company has a near monopoly over certain lucrative markets.
I think at this point it's unfair if we were to say the specific people are the issue. A big business has a lot of required components in order to keep running, and some of them are not directly revenue generating, but you still need most of them. That's a value of small companies, being so lean you can be hyper-focused and efficient. Bigger companies can perform at scales smaller ones can't, but that comes at the cost of inefficiencies of orchestrating the bigger operation. Just getting all the people aligned to do the things the business needs them to do is a huge and messy cost that smaller companies don't have, but it's required else your conglomerate would fall apart.
There was no HR, no management class, no purchasing agents or head of IT, maybe one hour of meetings a month and everything worked ridiculously, buttery smoothly.
We built the products that needed building, everyone pitched in and morale was generally high.
I could name one person who I'd consider had a "bullshit job", and another who's job was semi-bullshit. This is out of maybe 100 people I met across multiple departments.
I agree that a lot of businesses can cut down on bullshit process and bullshit jobs and keep running fine, but there's a lot of "cost centre" style jobs that are non-negotiable, especially when it comes to compliance and government reporting. Compliance and reporting is a business requirement that the software industry very rarely has but I'm expecting to see that change over the next decade. Accounting kind of falls in that category actually.
An aside, Blackmagic sounds great to work at. I avoid big companies specifically to avoid the bullshit process and people, so that sounds like a dream.
There was an accounting team, of course, as well as support and the most competent IT department on planet Earth (consisting of two guys for the whole company), but they were nimble and didn't overreach in terms of their authority.
Legal was outsourced, AFAIK.
>An aside, Blackmagic sounds great to work at.
It really was. The culture was amazing.
In a company with no HR, whose role is it to deal with employment contracts, ensure the company's compliance with labour laws and deal with personnel issues (which, at 500+ employees, probably arise more frequently than either of us would think)?
Interviews were handled by the team that the new hire would be joining, and most personnel issues were handled locally too. Very rarely they'd be kicked up the chain to the department head, but honestly these issues were very rare.
Seriously, without an "HR police" to complain to, most people would just deal with interpersonal issues like adults and move on.
Who handles health insurance and 401k match?
The Federal Government.
>Who handles the sexual harassment complaints and the illegal hiring discrimination?
Team leads, or lawyers if it gets far enough. You don't need a team of people on full-time for an event that happens twice a year.
In theory, if you had a competitive and fungible marketplace where a specific employee would boost profits by $100k, and you offered her a salary of $80k, someone else would outbid you with $90k, and someone else would outbid them at $95k etc. Even if the "margins" are low, no one is going to pass up on free money.
In practice, the labor marketplace isn't nearly competitive or fungible enough to expect the above. However, there is still a very different problem. Even if the average salary is "fair", people get rewarded a tiny fraction of the value they generate. Imagine if I'm working at Google and I find a way to save Google $10M/year via improved hardware efficiency. Despite the fact that this isn't part of my job description. How much of that $10M would I get in the form of a salary increase or bonus? A pretty darn tiny amount. 1% if I'm lucky. Is it worth it? Probably not. I might as well just do what my manager asks me to do, and spend my extra time learning Haskell and going to happy hours. This is pretty much what GP was alluding to. If companies started giving people a significant fraction of the value they generate, corporate life would change dramatically.
This isn't a good model. Boosting your company's profit by 100k doesn't mean they can boost any company's profit by 100k. If they could, they'd capture a lot more of the 100k.
The sole reason while your research generates millions of dollars of year of saving is because it would be applied at Google scale. So your work times google scale = $10M/year.
As stated above, you deserve to be compensated for a part of your work. But pretending that your compensation should also include the "Google scale" factor - which you did not contribute to in any meaningful way - is not right.
If you want your compensation to be based on the outcome of your work on the company as a whole, you need to work for equity and not for salary, and accept the associated risks - which might include getting nothing for a lot of efforts. Of course, your compensation will then also include the work made by others, which you might like or dislike.
If you want to be able to precisely measure your own contribution, exclude any other factors, and capture almost all of it, you probably are better of creating your own solo-founder type of company and stay solo. When 1+1=3, it's hard to precisely pinpoint which "1" generated the extra value.
If I can make $1 on my own, and you can make $1 on your own, but together we can make $4, we each deserve $2. I don't deserve $3, even though I turned your lone $1 into $4. But I also don't deserve just $1, because I did contribute to the scale factor. In todays world, it seems like we'd each get $1.
How do we divide the extra $100k. Are you pretending that you should get $50k (50 thousands times what you were doing alone) and we should get $50k (1.005 times what we were doing without you) as well ? That does not seem very fair to me at all.
"Google scale" wouldn't exist without the workers that make it possible. Seems to me like they can get more of that value they enable than they currently do.
Google probably runs at 25% profit margin, so $10M/y savings equate to $40M/y additional revenue. A Google cloud sales rep probably makes at least 5% sales commission, so they'd net at least $2M for equivalent sales (which they would only able to achieve because of Google scale, but if you make that argument with them, good luck keeping them employed). Conversely, a SWE delivering $10M/y savings would probably only see a small bump on their refreshers and bonus.
If it does it's no longer capitalism.
The subject of this email (Facebook) famously declined to participate however.
Previously you pretty much had to get lucky as an early engineer through IPO, but in the past decade it's been possible to save millions by working at FAANGs. And those millions trickle down into the ecosystem: people can afford to start their own companies, do angel investments, etc.
I think most of the bad press just comes from media clickbait. Mainstream news identifies Facebook as a competitor and threat on ideological model, see people complaining about conservative news sources topping most shared on Facebook lists, and on a business model basis (Facebook controls a large stream of traffic).
I don't think Facebook is some well run charity doing philanthropy - I just don't think they are meaningfully worse than their peers. I do think there is a concerted media campaign to malign Facebook and I think this is where the differential in how people think of Facebook versus these other companies comes from.
Does P&G put the psychological health of their customers over their own profits? Does Walmart? Apple? Exxon?
One might be able to make the slightly stronger argument is that the average user’s psychological health is more at odds with Facebook’s interests/profits than most other companies — putting it in the same category as, perhaps, Phillip Morris — but even that is not an argument against Facebook or Zuckerberg; any company in the same position would likely be doing the same kind of thing.
Finally, the whole thing got settled (slap on the wrist but something at least), so Google employees could finally get an answer in the weekly all-hands (TGIF).
Laszlo Bock was their head of people at the time, and claimed that Google still did nothing wrong, and that they only settled because they were caught up in the whole thing with other companies like Adobe who did do something wrong. He said they did nothing wrong because they only stopped outbound recruiting towards employees at those companies, which had no effect, and still accepted inbound applications.
This raises the obvious question - if outbound recruiting had no effect, why was Google so eager to put at end to it? And how could Google act like they were caught up it the crossfire when it was specifically emails by Sergey Brin that provided the strongest evidence of illegal collusions?
It blew my mind how Google insists they hire "the world's smartest people" but then can have executives on stage spin narratives with ridiculous holes in it and expect those smart people to believe it rather than have their intelligence insulted.
But sadly, most Google employees did seem to buy it. There's a strong cult of indoctrination, starting with calling yourself a Googler and wearing the stupid hat, that Google execs just had a halo effect. I think between 2010 and now that halo effect has massively worn off, especially with all the dirty details about misbehavior from Sergey Brin, Vic Gundtora, and Andy Rubin.
Nonetheless, it served as strong evidence as to how even really smart people can get caught up in cult-like communities. The "founder worship", the indoctrination into company culture, all of that is super common in Silicon Valley tech companies and for an obvious reason - it works.
I see it differently. It seems like strong evidence as to how smart the average googler really is. If you start with the assumption these people are smart then you can reach your conclusion, but if you discard that assumption you just have a group of gullible employees.
> Are you going to leave?
I did, actually (more than once). And it's what made me realize how few engineers care about anything other than their paychecks and ultimately themselves. When push comes to shove, the vast majority of people I've met and worked with have no qualms looking the other way for more compensation.
When push comes to shove, those people would have no power to change things anyway in the vast majority of cases. You can either live in a terrible world rich, or poor - in both cases the world wouldn't change but at least your life will be better.
A lot of problems are big enough that only governments can deal with them by the use of laws and appropriate enforcement (eventually escalating to violence if needed). But if the governments themselves benefit from the problem, or are owned by the corporations (corruption, or "lobbying" as it's called in the US), there's no chance for a few individuals to make a difference.
All entities, one day or another, commit some immoral thing according to some relative morality. We can't expect that they never will. Of course, a consistent and repeat offender should not be rewarded with our support. But it's unreasonable to hold people and groups of people to unreasonable standards, such as "sustained perfect moral behavior".
The average Googler most likely than not thinks that what Google did is bad, but not bad enough overall to warrant their quitting.
If it's the best place to extract maximum benefits (money, experience, recognition, etc) - then you take the good with the bad.
Even outside Google, the halo effect is insane. Look at how much hate companies like Facebook and Uber get on HN. But if you break down the scandals side by side, you'll realize Google has by far the worst ethics in the industry.
For example, Uber is accused of being sexist because a woman wrote an open letter that she was excluded in various ways as an employee there, such as not receiving swag in her size as the only woman on the team. That sounds like a shitty culture. Meanwhile, Vic Gundotra was credibly accused of inviting 22 year old junior SWEs to exec offsites to sexually harass them. Andy Rubin was found to have sexually assaulted a subordinate, according to Google's own investigation, and recieved a 90M payout.
What's a worse workplace for women? Not getting swag in your size, or being raped?
Yet when I worked at Google when all these scandals took place, ordering an Uber was a huge faux paus. You had to order a Lyft because "Uber=sexist."
Even now on a recent thread I mentioned how all these tech companies are more evil than your typical crypto startup, people said "only Uber and Facebook" look bad on a resume. I would argue that's purely a function of PR because I challenge anyone to debate me that Facebook or Uber had worse ethics scandals than Google.
Google has one of the strongest PR machines of all time and its effect on sentiment inside and outside the company is indisputable.
Some people think Google is a good product. Nearly everyone on HN hates Facebook and I think most people hate Instagram, too, now?
“On my first official day rotating on the team, my new manager sent me a string of messages over company chat… He was trying to stay out of trouble at work, he said, but he couldn't help getting in trouble, because he was looking for women to have sex with… When I reported the situation, I was told by both HR and upper management that even though this was clearly sexual harassment and he was propositioning me, it was this man's first offense, and that they wouldn't feel comfortable giving him anything other than a warning and a stern talking-to… Within a few months, he was reported once again for inappropriate behavior, and those who reported him were told it was still his "first offense". The situation was escalated as far up the chain as it could be escalated, and still nothing was done.”
https://www.susanjfowler.com/blog/2017/2/19/reflecting-on-on...
They don't hire the smartest people, they hire the greediest people. The only thing people worship in silicon valley and tech in general is money. That's it. An if your salary, stock options, etc are dependent on believing and selling lies, that's what you do. When an industry or group gets "saint status" or proclaims to be the agents of good, your spidey senses should start tingling.
the trial awards and verdict happened in 2014 - https://www.reuters.com/article/us-apple-google-lawsuit-excl...
What makes you say that? Everyone I know is aware that Google was doing dirt, but salaries were going up so fast at the time it hardly mattered. Especially when the collusion ended we went through several years of absurd salary growth. Even during the period of collusion, Google was being pretty generous with compensation (e.g. this event -- https://www.businessinsider.com/google-options-repricing-bai...).
Every programmer who was there at that time and has stayed has either been spending profligately or is fairly wealthy at this point.
As an example they will finally increase vacation from 15days to 20days on April 1st this year.
The media reports this as "on top of already lavish perks Googlers are now getting 20 days of PTO a year!".
Gee whiz amazing. An increase from 15 days of PTO. If only we didn't much more than that in my much lower quality of life home country as a standard for tech workers.
And sorry if this sounds a bit spoilt. I should be grateful to work at a large megacorp in this economy right? It's just that Google isn't any better in terms of working conditions than any other big tech company. In fact in general it's a little bit worse yet there's propaganda movies (The Internship) about how great it is to work at Google.
It's a job. No one else seems to want to acknowledge it.
That change is for junior employees. It's still overdue, but vacation bumps up to 25 days per year after you have some tenure, and has done for more than a decade. I'm not saying that 25 days is anything to write home about -- I've heard of places that give 30, or unlimited -- but 25 is not bad.
Previously after 4 years you got 20 days per year. Then you got 25 at year 6+.
So if you're saying 'year six' starts the day after you've been there for 5 full years, then yes, we are saying the same thing.
(Source: have been at Google almost 8 years, and went through both of those bumps)
* you carry no vacation liability on the books year-to-year
* if you don't encourage people to take it, or provide slack when they can take time off they use less vacation
I am not saying 15 days of PTO is high (it isn't) but you're comparing different countries. Local customs vary hugely from country to country: for example, when I was at Google UK, I got 30 days of paid annual leave.
I don't remember reading about any formally signed agreements. Executives aren't going to create an incriminating paper trail like that. Instead, it was some complaints in emails and an implied understanding. E.g. Steve Jobs and Eric Schmidt emails: https://en.wikipedia.org/wiki/Eric_Schmidt#Role_in_illegal_n...
[1] https://www.engadget.com/2014-03-24-emails-reveal-that-steve...