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Comment by throwaway894345 | Hacker News Reader

Reminds me of the Microsoft days circa 2010 when Microsoft published half a dozen media players (Zune!), word processors, email clients, etc.

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I think this is a systemic problem of an industry where gross margin is 80% or higher, so you can plow all that extra money into superfluous headcount tasked with objectives of questionable business value. It’s a curse of riches, if you will. The rest of us living on 15 to 30% margins need to think a little harder about what we do and why.

> I think this is a systemic problem of an industry where gross margin is 80%

explain how GOOG's margin is 80%

what methodology do you use to derive that number?

just curious.

Wasn't it always somewhere between 20 to 30% (especially more recently in the 30s) but the real difference is, they're in the billions of dollars, your small business might be in the millions, it's quite a drastic difference altogether.

Its 36% for Q1 2026.

* https://i.imgur.com/3gDVMCk.png

The way I understood the 80% is that is the margin on the actual product. 36% is what remains after the “investments” in moonshot projects nobody asked for.

It's worse when you consider these are the only companies that can afford it due to the tax implications of R&D, my understanding was that you still pay the full bill on a developer building something as if you were making profits, even though you're burning their entire salary and other resources on it.

FWIW, what you will see at times in the HF world is a firm will want to get into a strategy and build competing teams. It lights a fire under both. It diversifies the risk. You can select winner and move some people over from loser. And if they both work, they both work.

It isn't a crazy idea if the opportunity is large enough to make the larger investment required worth it.

The problem I see in applying this to products is it can be very confusing for clients.

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