Comment by kortilla | Hacker News Reader

Comment by kortilla | Hacker News Reader

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> the problem is US-centric capitalism cannot quantify that impact (and it doesn't want to, given that attrition-related problems are long-term issues with years of time to impact)

This is false. People invest on many year horizons all of the time when they believe in the company. If there was good evidence that having an average tenure of 5+ years was a great boost to the company, people would clamor to invest in companies like that.

This was basically Google’s entire pitch when they were an early public company. Happy employees == great things. I remember when 60 minutes or dateline did some special about google before 2010 and people were floored by how good the employees got it. However, hiring standards relaxed and now google is slowly rotting from the inside to realize it’s the new IBM.

Long tenure alone is absolutely not an advantage. It’s very easy to have a bunch of dead weight that just looks like they know what’s going on.

So back to your point about experience mattering. That should show up in customer satisfaction, project turnaround speed, success rates, etc. Otherwise it’s pretty meaningless. And guess who already measures those KPIs…

> This is false. People invest on many year horizons all of the time when they believe in the company.

The perfect example of why that is not the case at least in Silicon Valley is Google and their messengers and social networks... just how many of them exist(ed)? Four? Five? Each of them was someone's promotion project, left to languish, suffer and eventually die afterwards. Honestly it's a wonder Gmail and Maps are still around, their UI hasn't been updated much in ages despite obvious potential for improvements... I guess the only reason why they are alive is that they generate absurd amounts of data.

How is abandoned projects and example of stock investing time horizons?

> This is false. People invest on many year horizons all of the time when they believe in the company.

Granted, but they usually have the option to sell at many points along the way.

Think about an alternative financial instrument. What if you could invest $X in a public company (and get a higher rate of return because of the higher risk) but you lose the ability to sell until five years have passed?

This is one kind of option that might be worth trying. I want to see more mechanisms promoting long-term investment in our public markets. (Bonds are not identical to what I described BTW.)

The lack of these kinds of options (sure, bonds exist but I've not noticed them used with any notable significance in public companies) is why people talk about the short term quarterly focus of Wall Street.

I don’t understand what the point is. You have the option already to hold on for 5 years+. Many people do this (especially employees with vesting schedules) and they are rewarded for doing it.

> is why people talk about the short term quarterly focus of Wall Street.

This is a false meme though. Tesla was worth more than multiple profitable long standing car manufacturers combined before it ever turned a profit. Investors fixate on short term performance when the company has no long term vision and deriving cash flows is much easier (e.g. a container ship holding company).

> You have the option already to hold on for 5 years+.

The difference is having the option. :) Behavior tends to be different if you don't have the option to sell during a window of time.

In this hypothetical case it might serve as a built-in grace period. Companies that otherwise might have failed if measured and punished quarter by quarter might have time to build a product over five year time horizon.

> Long tenure alone is absolutely not an advantage.

It's also not necessarily a disadvantage. The real argument is that people management is important. Everyone from the new person who just joined to the decade long senior engineer need to be held to high standards. Which brings me to my next point.

The big problem with Twitter was management. Dorsey was barely a CEO for many years. Parag didn't seem to want to try anything. I think people routinely underestimate how important good leaders are. "There are no bad teams, only bad leaders" comes to mind. So far Elon has shown himself to be terrible in this regard. With SpaceX and Tesla he communicated a vision, with Twitter he's communicated very little and just instituted chaos.

> The big problem with Twitter was management. Dorsey was barely a CEO for many years. Parag didn't seem to want to try anything.

The problem was even worse: there was no vision at all from no one, not leadership, not the investors, not the users, what Twitter should be, other than "it is a way for instant communication with feeds". Everything else was completely lacking: what features do people want, what moderation policy should be applied, how does Twitter plan to make money.

The only ones that had at least some sort of vision where activists - the left wing, the advertisers and large parts of the users didn't want Nazis any more, and the right wing wanted "free speech" aka allowing Nazis.

> there was no vision at all from no one

Completely agree.

I think this is down to the time horizons each kind of company optimizes for. Mittelstands are usually owned by families and they basically try to build a business that will feed the parents as well as kids when they come of age. Publicly listed companies usually optimize for this quarter. So even if you are looking at the same KPIs, you could get different outcomes just due to the utility functions being different.

> Publicly listed companies usually optimize for this quarter.

No they don’t. The sales org might but when I was at GOOG the quarterly deadlines had zero influence on launch dates, engineering decisions, etc.

Public companies frequently get punished severely in the market when they have a great quarter but advise a negative outlook for the year.

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