It's funny I was just talking about this yesterday. By tying compensation so tightly to stock price, it incentivizes everyone to do what's best for the stock price, not what's best for the customer.
This email is the perfect example of that.
This email is the perfect example of that.
Google's unusual share class structure was supposed to give them a degree of independence from these forces, but it didn't last. They still tie employee comp to share prices, so they still have to care about share prices. Facebook has even stronger centralization of shareholder power, but its pay structure is very similar. Can you think of any example of a public company that is resisting these forces?
They also have more cash than they know how to spend. So maybe the pressure to increase revenue this quarter is just lower in general.
> If your device isn’t eligible for credit, we’ll recycle it for free.
Per https://www.vice.com/en/article/yp73jw/apple-recycling-iphon... (2017, so it might have changed since):
> Apple rejects current industry best practices by forcing the recyclers it works with to shred iPhones and MacBooks so they cannot be repaired or reused—instead, they are turned into tiny shards of metal and glass.
> "Materials are manually and mechanically disassembled and shredded into commodity-sized fractions of metals, plastics, and glass," John Yeider, Apple's recycling program manager, wrote under a heading called "Takeback Program Report" in a 2013 report to Michigan Department of Environmental Quality. "All hard drives are shredded in confetti-sized pieces. The pieces are then sorted into commodities grade materials. After sorting, the materials are sold and used for production stock in new products. No reuse. No parts harvesting. No resale."
Recycling is not a good thing: it is an expensive and intensive industrial process. Recycling is a last resort: if you have to make new stuff then sure, recycle, but it's better to avoid making new stuff by (a) not needing stuff in the first place, and (b) maintaining and repairing old stuff for as long as possible. Whatever happened to “reduce” and “reuse”?
It sounds like that's exactly what Apple is doing though?
>> If your device isn’t eligible for credit, we’ll recycle it for free.
If they can, they will resell the device. But a 5+ year old phone with a busted screen and dead battery is just trash. There is nothing to do but recycle it.
Just food for thought - why do you think that the ipad (with the same processor as the laptop) has not gotten more capable over the years? They can’t figure out how to do it? No one on the ipadOS team has the brains to make it happen, or it just hasn’t occurred to them? Or maybe there has been an internal conversation and they realized that it would drop the sales of Mac machines below a threshold where fixed costs outweigh the mac team’s ability to stay afloat (pure speculation on my part)?
Make no mistake, Apple is no paragon of virtue here. I love their products (though they also frustrate me), but the company is largely the same as Google and Microsoft in ethics.
But, I still believe Apple is trying to make the best products they can. Their design philosophy is heavily opinionated, and therefore a lot of people don't like it. Google's core mission is to slurp up user data & sell ads, and they are willing to make their products worse for the user to satisfy that goal. I don't think Apple would intentionally make a product worse to boost some short term metrics in that same way.
> why do you think that the ipad (with the same processor as the laptop) has not gotten more capable over the years?
I think Apple has consistently shown that they don't really care about power users. Why can't I snap windows on a mac? Why can't I customize the launcher on an iphone? Apple doesn't care about that use case. They stuck an m1 into the ipad because they already make them and its a super power efficient chip; they still have the same product vision for the ipad.
> Make no mistake, Apple is no paragon of virtue here.
Certainly, no company is virtuous. I think its more about incentives. Apple is incentivized to make good products and maintain their brand. Google is incentivized to sell as many ads as possible.
Google is not an innovative company and cannot launch anything that people actually want to use. What they do is buy things other people built and scale them up. And in order to do that, you need access to the capital markets so you can borrow money[0] to buy other companies. Those loans are collateralized against the company that took out the loan, and if the company's value goes down, your credit limit goes down.
The only way to actually liberate companies from these forces is not to turn the company from a shareholder oligarchy into a founder dictatorship, but to restrict M&A so that the competitive pressures of "monopolize or die" subside.
[0] You could self-finance M&A but most businesses don't like to do that because it ties up cash flow.
If https://www.cnbc.com/2019/12/03/a-tech-firm-tried-it-all-to-... is to be believed, average tenure at Google is just over a year. That turns stock options from a retirement fund into a nice bonus to cover looking for a new job.
https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.
depressing
When I say this about my phone, I get told that It was my choice to buy it.
I would really like to have the same set of principles applied consistently to ownership of end product and ownership of the stock.
Currently some people enjoy greater rights for no reason other than privilidge.
> A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end, and does not extend to a change in the end itself, to the reduction of profits, or to the non-distribution of profits among stockholders in order to devote them to other purposes…
This kinda-relates to other legal theories, such the rule against perpetuities [0], since it's hard to assemble a framework that can survive 50.0001% of the shareholders deciding to loot it.
The closest I can think of actually involves legal-statute and tax law, where a company incorporates for an explicitly-charitable or non-profit purpose and then the government enforces that status indefinitely.
A typical counterexample to compensating in proportion to equity performance is compensating in proportion to revenue or profit performance (i.e. something still related to market performance, but with fewer tangential variabilities).
But I don't think that switcheroo would have resulted in a different outcome, here?
I think, perhaps, the underlying issue is the cultural norm of lionizing revenue to the exclusion of all other corporate principles. In this case, it's not really the Sales person's fault. It's Jerry's manager, or Jerry's managers' manager, etc. – for allowing the feature-blind prioritization of revenue to fester.
You could easily tie compensation to these metrics. Of course in some cases these too can be gamed, but as long as you find a metric that mirrors customer happiness, then everyone is incentivized to increase customer happiness.
You can increase average time on site by just funneling people lowest common denominator garbage all day.
Pretending there is some magic metric here and Google isn’t meeting it is ridiculous. Google is very well liked by the average person!
Hence the adage: the most effective way to take a useful metric for measuring progress towards a goal and make it useless, is to make the metric the goal.
The customers are ad buyers and their concerns and revenue dips are being taken seriously here as the public company /esop system is designed to do.