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Comment by mattgreenrocks | Hacker News Reader

The undercurrent of these discussions always bothers me. Wrong decisions are never made, they're always justified by current circumstances or hypothetical future circumstances. Past decisions were never wrong, either, even if current information shows them to be. (Who could have known?)

2021: "we have to overhire! The economy is great and otherwise we'll lose future talent!"

2022: "we have to fire! The economy isn't great and everyone else is firing!"

(In writing this I realize the validity of said decision doesn't matter nearly as much as the perception of the person that made it. Much like Twitter, it isn't just what you say, it's who you are + what you say.)

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> Wrong decisions are never made, they're always justified by current circumstances or hypothetical future circumstances.

There are plenty of examples of managers who are simply bad at making good decisions.

Full disclosure: I've worked for a few.

At one company, two consecutive CEOs took the company from turning a fairly healthy profit into voluntary liquidation in a handful of years. The first one quit after a fractious meeting with shareholders, and was replaced with the second, who wasn't any better. I jumped shortly before the liquidation was announced, it came as a complete shock to most of the rest of the staff.

My view is that it's sophistry trying to claim all poor decisions were somehow justified at the time. Some people - including managers - are just inept!

Ineptitude is high on the list. But I would put misaligned incentives pretty high on the list of reasons too. So many executives make decisions that make sense for their bottom line but that may not be good for the company and shareholders long-term. Same goes for the directors. Who cares if you create a long lasting, stable company when you could just win the lottery now, cash out and move on to another conquest.

I still think it’s mostly ineptitude. Hiring a bunch of people only to fire them isn’t gaining you anything.

People are still on a bell curve and most executives are somewhere in the “very average” area, like me and most people. And 50% of people are worse than average.

I remember people loudly exclaiming that people wouldn’t be buying Peletons once people started going back to gyms but the “who could have known?” sentiment appeared anyway after the stock had crashed.

I think Peletons were just a fad. Who wants an exercise bike with a monthly fee? That's a bad business model.

NordicTrak is doing it too. Businesses love subscriptions, especially for one-time/infrequent purchases - if Sealy could come up with a mattress subscription model they would.

$19/mo: https://www.eightsleep.com/sleepos/ (YC-S15)

Yep. Look at the fate of nearly every piece of home exercise equipment sold in the last 50 years. The vast majority fall into disuse pretty quickly. Who's going to want to keep paying a monthly fee for something they don't use? Hopefully it's easier to cancel than a gym membership.

IOT was largely leveraged as a get rich quick scam... You pay a premium for a device that expires or becomes obsolete one year after it is sold.

There is no need for a toaster to be connected to WiFi, yet somehow, it's fast becoming the only option available.

Cyclists and runners like paying monthly for fitness apps with a social networking component so it’s not a completely dumb idea. I enjoy paying for Strava for example and to be honest don’t need any new features. They just need to keep it working as it is.

You will love the new proce then… For me it needs to be more like Zwift to justify paying for it. Even Zwift is a mediocre game and if you compare it to other non sport games, the subscription price isn’t justified in any way.

I think an even bigger factor is that people had a shit ton of free time during the pandemic because people were either laid off or working remote. On top of that, a lot of activities weren’t possible anymore.

What do people say they don’t have enough time to do? Work out

So people worked out. Exercise equipment became out of stock, but Pelotons I don’t think did. Hiking trails and campsites got packed too. People were doing all these activities that they never did before the pandemic. The market for exercise — and Pelotons — ballooned.

But obviously once the pandemic ended, people would get jobs back and it was likely that a lot of jobs would go back to the office. People will easily go back to prefer going out instead of working out (not making a value judgement here - you do you). Now no one has time to exercise anymore and the exercise market has shrunk back to “people who make time to workout and want to invest in doing it at home,” which is tiny. The subset of that market that is willing to “drop a few Gs on an exercise bike” is a sliver

Peloton's fate was obvious to anyone who cared to look.

Some people simply don't care if there is a value proposition because they are investing in market sentiment, not fundamentals.

Other people simply don't bother scrutinizing the value proposition because they dont care about their investment and are comfortable gambling.

I read their Series F pitch deck and the projections were clearly detached from reality. Targets were to basically capture more revenue than the entire gym sector and home equipment sector.

Folks who went for the series F pump and dump lucked out bigtime with the pandemic

So you don’t think it was wrong to assume that the prosperous and highly unusual scenario of the Covid effects would be around for an extended timeframe that legitimately would impact future cash flows that validated the huge increases in the value of almost all tech stocks? It made absolutely no sense to me and many other investors, but so many people drank the koolaid anyway, buying more stocks, hiring more people, pumping up the fervor, etc.

The fact that you're describing it as "drinking the koolaid" goes to show that it was a questionable assumption. Certainly, the worldwide pandemic created an uncertain atmosphere. On the other, everyone knew that the Fed was pursuing some very drastic actions. So why did so many tech companies simply go along with it? Seems like a lack of foresight and lack of willingness to challenge the status quo.

You were right only because covid turned out to be pretty mild (so far) and things pretty much went back to normal. If we were still living in isolation then these increased valuations for Zoom etc made sense.

Zoom stock went from $67 to $512 from Jan 2020 to Oct 2020. Zoom earnings reached around $1 per quarter EPS or $4 per year during its short heyday in 2021-2022. It would take a century of earnings to be worth that price.

It made perfect sense from an investor‘s point of view.

Buy the stock low, sell it before it drops.

You’re usually investing in large public companies to make money, not “support the long term cause.”

Also it made sense for the time period. Say you already had $10,000 invested in a company that sells restaurant supplies. Are you going to keep it in the company for the entirety of COVID while your money evaporates or put it into a tech company temporarily and then move it back afterwards?

I guess I'm not sure what you're referring to here. Almost all the big tech layoffs I saw in 2022 came with an admission from the CEO that, hey, we did make the wrong call and we wish we'd made the right one. When people talk about past conditions, they're just explaining why the wrong calls seemed reasonable at the time.

I'm thinking out loud...apologies to everyone in earshot. :)

More trying to resolve the dissonance between high-status positions and the ability to discharge accountability.

I'm not saying it is "wrong," I'm just pointing out that world events matter and people should really pay attention and remember what's going on. With COVID, a lot of new stuff happened. We started dining outdoors. Was it going to stay? Maybe, maybe not, but don't just assume it's the new normal.

Just like right now, we still have a war going on, US became the world's natural gas exporter because of the war, how supply chains are still recovering from COVID, and things like that. Suddenly, everything makes a lot of sense with context

"I'm just pointing out that world events matter and people should really pay attention and remember what's going on"

This is obvious and extremely vague.

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