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Comment by l0b0 | Hacker News Reader

How do big companies stay alive for so long? I guess it's still possible to coast on a single success for so long that the company has time to completely rot from the inside before any of it reaches their customers. Or maybe the early money gets invested in a bajillion projects, on the very slim chance that the company isn't a one-trick pony.

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There are many companies that are so wealthy that they could just stop all revenue completely and coast no for decades while management continues to skim out their fat paychecks. Some theorize that this has already occurred.

Besides, -- if you think how some companies work is fugly, go take a look at biology or politics. Companies are evolved systems. Once they're old enough they're almost always messy even when they aren't especially dysfunctional.

The human body is full of almost vestigial parts and dead end metabolic pathways... huge chunks of our DNA are just self replicating repeating sequences.

In reality the cruft in companies is often not even non-functional, but sometimes it serves some more complex purpose. Lots of large companies, for example, have some useless figurehead security position that exists for the actual purpose of having someone to fire when there the inevitable serious security issue occurs, without putting anyone actually productive at risk.

Companies are built out of and owned by people. Like anything else they have to respect the the limitations of the building material and the needs of their owners. The resulting requirements are no less real even though they might not exist in a world populated by homoeconomicus instead of man kind. If man kind wants a blood sacrifice for security incidents then it's reasonable and good for a company to have one.

For investors winding down and returning money fast might be preferable to a company without profits.

Sure, and for a period corporate raiders took advantage of companies like that-- but standard defenses against raiding have become well known and widely deployed. Like life learning how to make cellulose suddenly the landscapes were littered with the husks of things that nothing knew how to digest.

But the value to society at large isn't just a profit (much less an ever growing profit). It's good that we have businesses which simply satisfy the involved parties (their customers, their employees, and their owners)-- even if they don't perform well on any external metric of efficiency.

Investors certainly look at winddown scenarios for companies not performing. Sometimes broader considerations win out, sometimes a change in management is all that is needed, sometimes more aggressive things happen.

How is there value to society in zombie corps that no longer make a profit?

The employees are still getting paid! Quite often the product is genuinely useful. It may be a beloved brand. Companies don't vanish the microsecond they cease to be profitable and nor should they. It's only when they run out of cash.

I don't think it's anyone's job to be "euthanizing" low-profit businesses that might recover if there is a turn in the economy. The "zombie" concept is economically illiterate. Occasionally you will get a private equity firm doing this and the result is widely unpopular (Toys R Us, Maplin, etc)

The employees and customers are surely a part of society.

More offent than not, not making enough profit is overreaching the profit goals to justify unfair stock prices. And the executives and board make bad gambles since they lose the owners money if they lose and win the owners money of they win.

Wish I could double upvote this over all the political commentary.

This is an incredible comment. The part that drives people to absolute frustration is that you might be in some weird vestigial organ, either with no purpose or with a purpose not at all aligned with what the organization is saying, and then waste years trying to "fix it". It's a bursting appendix, don't worry about it - or well, maybe this is a bit stretched now, remove it.

You might enjoy reading the external version [1] of View from Above [2] on apenwarr's blog. The internal version is much better if you can get a copy of that as it goes into his actual experience with trying to improve Google.

Although IIUC you both read High Output Management so it might just be nice to know that even within fang people think things are wrong.

[1]: https://news.ycombinator.com/item?id=34385570 [2]: https://apenwarr.ca/log/20190926

Well, if you find yourself as an individual contributor in some weird vestigial organ, I feel like you have a few choices:

  * Stay put to collect the money, with the morale cost of feeling like you don't have a purpose and the risk of getting axed if/when the bursting appendix gets removed
  * Proactively seek a lateral transfer to a position doing something more meaningful
  * Get out. Find a different employer.

The latter two are likely better, but have their own risks.

Because they're not actually much more dysfunctional than smaller companies, you just hear more stories because they're bigger. Bigger means more employees for things to go wrong around, bigger means that people are more likely to be interested in hearing stories and thus other people are more likely to tell, remember, and repeat said stories.

A story about some idiot doing an idiotic thing at Google is vastly more likely to be passed around forever than a story at a random mom and pop company*. People love hearing about morons at big tech giants, and the storytellers oblige.

That, plus sufficient economies of scale or complementary tech products.

* unless that story is REALLY incredible, like that guy who went to an interview and accidentally killed the CEO's dog

The bigness itself causes dysfunction, apart from just having more employees and more chances to have a disaster. It's the whole Dunbar's number thing, we really haven't figured out a great way to work effectively in huge groups yet.

But... some things can only be done with huge groups, so even working ineffectively can be worth it. And in a competitive setting, your competition also has these problems, so you can win in the market despite them.

The problem with tiny startups is often that people are really inexperienced with people problems. Large corps somewhat fix that by having HR departments and all. But ultimately I'm starting to think today's business often relies on some sort of hype train.

I tend to think of HR departments as a people problem, not the solution to one.

HR is often awful, sure. But it helps get the basics right.

My brother works at a small (<100 people) startup in the material sciences, and the amount of times that his and his co-workers pay statements got messed up in creative ways is incredible. Meanwhile I'm working at a decades old big company and never had any problems like that.

Yeah if HR would stick to benefits administration / support and nothing else, I would have no issues with them.

There are plenty of businesses that don't rely on hype, you just won't find them on HN. The average supermarket chain, steel mill or insurance company just produce valuable goods or services that people and/or businesses want to buy, and they can be stable businesses for decades or even centuries. Hacker news is a forum hosted by a VC that predominantly invests in software startups however, and so you won't find a lot of stories here about companies that don't fit that mold.

Seems to attract broken people searching for greatness.

> The bigness itself causes dysfunction

It does, but the flip side is that the bigness also causes some greater efficiencies due to economies of scale or specialization.

In my experience bigger companies are more dysfunctional, but they appear less so the higher up in the company you are.

When you're just some low-level worker for a mega corp high-level decisions tend to get passed down with little to no context through several layers of management half of whom are disconnected from the issues you face on the ground, and the other half are disconnected from the decision making at the top.

This does cause some dysfunction, but I agree with you that it's not often not as bad as it seems when you have context of the why decisions are being made.

Not all companies do such a bad job at communication either and flatter organisation structures can help empower the people on the ground to make decisions which might otherwise need the approval of several layers of management. But still, in a large company there's inevitably always going to be some disconnect which will cause some level of dysfunction that you wouldn't get in a small company.

Author here. My organization continues to exist in its current massive form due to regulatory capture - I can't provide details and remain anonymous, unfortunately. We would probably survive at 1/10th the size or something akin to that without that protection, and we would be considerably more efficient.

EDIT: Oh, and the part that earns money through regulatory capture earns so much money that we can have all these departments doing nothing in the meantime. We might do something one day with amazing leadership, but the incentives and odds are stacked against us.

At its core a company is a machine that makes money.

Once the machine is up and running, you just have to avoid not breaking it. An org at this stage can be completely dysfunctional as long as the machine keeps running. Also figuring out the "wins" while scaling are much more obvious than while trying to start.

That's true if the environment where the machine work doesn't change. However with business environment changing the machine need to change as well.

Big corporations have "moats" (as per Buffet's definition) and a big bank vendor locked into your solution will drag a badly working machine for years.

Sometimes being big is a structural advantage. Also there's a variant of the Peter Principle at work: any effective company grows until it is ineffective, therefore productive work is done only by companies that haven't finished growing yet.

Big companies tend to have a handful of divisions that generate almost all of the revenue, and then everyone else is a cost centre. As long as the revenue generators outweigh the cost centres, no one really cares broadly about efficiency.

For Facebook the revenue generator is Ads. For Amazon it was initially physical shipping, and later cloud hosting. Outside of those divisions you could burn billions on long shot projects that went nowhere, and nobody really cared...

A lot of big companies don’t. Additionally, a single success often implies multiple times smaller successes that are just not visible outside a corporation.

Regulatory capture.

and Zombie Companies

https://www.cnbc.com/2023/10/31/zombie-firm-bankruptcies-ami...

What sort of regulations are preventing a google competitor from starting up? "GDPR/CCPA" isn't very convincing because it was only a recent thing, but google has been around for decades.

Regulatory capture covers more than just regulations. It also covers the lack of regulation; including anti-trust.

Do you want to do a search or mobile OS startup with Google’s market position? Do you think they’ll release a YouTube or Google Maps application for your phone OS?

I think that's stretching the definition of "regulatory capture" beyond useful meaning. Just say "monopoly" or the softer "market power".

- Patents, grow a bit more and the sharks will come.

- Unfair taxation advantages, and fines are laughable.

One overlooked reason is the government intervening to save these companies. Either by bailout, lowering rate, special loans, etc… This prevents these companies from going into bankruptcy and restructuring and keeps the status quo as is.

It’s kind of a disguised communism and the longer the government keeps proping the economy (and making it difficult to start new companies), the worse this will get.

> is the government intervening to save these companies

Name some.

Many very dysfunctional companies are also very profitable and have no need of outside bailouts. How long has IBM been at it?

General Electric.

Corporate socialism it's often called.

Where's the disguise?

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