Comment by aeturnum | Hacker News Reader

Comment by aeturnum | Hacker News Reader

> Facebook’s 2020 Gaming App that they said would rival Twitch? Dead. Hobbi, their app for “documenting personal projects?” Dead in less than 6 months. Campus, Facebook’s college-student-focused app? Dead in two years. Live-streamed shopping events? Facebook’s live-shopping feature? Dead[...]

A thing that I genuinely don't understand about these mega-companies (Google being another example) trying to expand into new fields is how weirdly uncommitted they are. Stadia is another example.

It feels like a lot of these side-services get closed down because they haven't reached some minimum level of revenue (I've heard the phrase "move the needle" in relation to google)...but so many of them are in new areas. I suspect Stadia was the most popular and profitable game-streaming-service ever - but it just didn't live up to Google's needs I guess?

It's to the point that my sense is that being acquired by Google or Facebook seems like a very bad sign for the long-term health of a service. Does anyone understand the internal logic behind this pattern of investing & abandoning with such reliability?

I think it's a unique artifact of the way that software work is done.

Software is, at its core, an intellectual exercise. When you start up a new multi-billion dollar thing, there's very little physical manifestation. There isn't a sprawling factory, a company town, a bustling assembly line...

There's just a piece of software. Building it takes a lot of effort, but not like effort effort the way you have to move the ground and get machines in to build a factory.

So even though walking away from a massive software project means, in dollars, the same as abandoning a giant factory, it isn't legible in the same psychological way. If you're Intel, and your new process node isn't working the way you expected, do you board up the factory? No, of course not! It's a gigantic thing that you can look at and say "wow, we spent a billion dollars on this." But if you're Facebook, come monday morning, you can just tell all of your ICs -- "hey, you guys aren't working on this any more."

This is kind of related to how quickly money flows into software. Money come money go. Software come, software go. Not so in the physical world.

That's my theory.

That also means -- if you treat your software projects like a big factory, you can actually distinguish yourself. Like many on HN, I am very hesitant to sign up for a new google service, even if it's really really cool and I would pay for it! Because there is no factory, there is no machines, there's just information, information that can stop being improved tomorrow.

That is an interesting point. Also those being put at the helm to run many such in-house or acquired projects probably don't have enough skin in the game or passion. Their metrics are always towards near-term progress; not tied to revenue, viability or even traction for that product line. And like you said, no big consequences other than switching to write code in another repo.

That said, it is not easy being Zuck. How do you steer a huge complex company like Facebook? He has had 3 mega mega hits (Fb, WA and Insta) and the company has produced tons of other useful tech and trained professionals.

I agree the lack of commitment is weird. Microsoft stuck to Bing for a long time before it now having a shot of becoming something relevant to MS’ bottom line (i.e. > 1% of MS revenue)

With Bing it feels like those large tech companies want to keep money-losing projects to keep their competition "in-check". Bing vs Google, Chromebook vs Windows, Google Shopping vs Amazon, etc.

There may be various reasons for that, I heard different opinions. It seems that it's just a part of the "chess" game between those companies.

Bing has generally made money for Microsoft. Search is just so valuable -- look at Google and how it built a whole conglomerate of loss leaders around it.

It feels like some projects are considered strategically important (Waymo comes to mind) while others are kind of allowed to sink or swim. It also seems like these companies acquire a lot of businesses that realistically will never hit the desired metrics in the limited time period they are given?

Did the same for Xbox as well: that was lossmaking for years, if I remember correctly. And yet now, and for a long time, they've had a very successful business. One thing I'll say for Microsoft: they really know how to commit. Doesn't always work of course (Windows Mobile, for example), but a lot of their more successful bets have been very long plays.

My understanding (as someone who worked at Meta and sold a startup to a large corporation) is that, in this particular case, money-printing giants are cursed by their own blessing.

The thing that prints them money limits them in terms of what margins and growth rates are acceptable. As a public company, your metrics are all bundled for simplicity into EBITDA, profit margins, etc. Investors buying your stock and your existing investors care a lot about these numbers.

So when your new product has a lower margin or a lower growth rate, this affects your whole company's metrics. This is why they try to isolate such projects into "labs" and the like, and this is why it's challenging to move from this "lab" into the main company portfolio. Your metrics need to be as high as your main product line - this one-in-a-million exceptional thing that made you huge. Which is pretty impossible.

Basically, the bar is very high, and not killing it and maturing it instead has very negative externalities in most cases. And so, it goes to the history dump.

Very unfortunate, and as a startup founder, I'd think twice about who to sell to. Also, as a startup founder, I know that often there's not much choice.

How does your career grow if you launch a product, vs grow or maintain an existing one?

I've heard a lot about how mis-aligned the internal incentives are at Google along these lines, but there is usually also some kind of plan on the business side. If what is happening is really that these projects are killed because all the engineers quit...that seems like a big problem!

Really contrasts to PlayStation doesn’t it?

Or Xbox! Which I'm pretty sure is still in the red overall after 21 years.

Seemingly they are more committed to tight financial KPIs, which will never allow them the flexibility to successfully traverse the moat of their own bad PR in certain product niches.

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