60-80% of the cost base in many F500s is bullshit (exceptions exist. FMCG, any industry where physical products make up their balance sheet. Not salaries). Any excuse to avoid returning money to shareholders.
Everyone quietly acknowledges. If say, Visa, really tried, they could cut the cost base by 50% and achieve the same output.
Carl Icahn style shareholder activists have a point.
Forget tech companies. Most public companies are a conspiracy by VPs/C-suite/board.
The difference with tech companies is Google feather-beds its EMPLOYEES with free food.
From a pure capitalist standpoint. You could run Facebook's business on 20 billion USD in costs. Their cost base is enormous because Z has ZERO interest in cutting costs.
He's in it for the ego/vanity. Same as every other F500 CEO/Chairman.
Ego is the driver, not the balance sheet.
Carl Icahn story about cutting costs: https://www.youtube.com/watch?v=WSatPoD2W-o - fired a building full of people, never heard about it again.
Most companies are run as bureaucracies, dual share classes haven't helped. There is no difference between your average Google employee and a civil servant.
Unfortunately, this is a pretty raw deal for shareholders. You cash out insiders, the bureaucrats move in, the amount of cost extends to the revenue base, eventually revenue slows down (bureaucrats don't tend to be good stewards of capital), the rats all leave the ship, you find out the cost base could have been 50% smaller all along, and you are left with a stock on its way to bankruptcy.
as part of an already very good compensation package.
- We should go for something akin to universal basic income? Given we could produce a bunch of output with very few people (I guess at that point it's more and ideological question of if these few people that get to stay + shareholders are going to get all that value rather than someone else) - People that are talking about "productivity growth" has declined the past 20 - 40 years, are probably wrong and we have seen productivity growth, we've just filled it up with useless stuff and made up jobs? - It also sort of implies that some of the projects that Google and Meta has taken on even though not financially sound right now haven't produced any value for humanity (and I fully understand that in a capitalist society; profits are the way we value things). I think they have and a lot do (like long tail stuff like producing knowledge, producing open source tech, driving tech that while not mature now, will explode in the future, VR + self driving comes to mind)
Another thing that comes to mind when it comes to founder driven companies doing whatever they want is all the Elon Musk companies. He has also made a bunch of crazy bets that "value"-companies would def not have made.
> What is clear is that Zuckerberg in particular seems more committed to VR than ever. It may be the case that he is seen as the founding father of the Metaverse, even as Meta is a potential casualty.
My guess is this is going to be a really rough winter / several quarters for Facebook until they reconsider.
Zuckerberg seems to envision matrix-style VR where it's 24/7 immersive and nobody outside a very small fringe group is at all interested in that proposition. I just fail to see the value proposition of VR socialization over video and even voice calls. If you'll recall even video calls have only really caught on since the pandemic - skype did business pre-pandemic, but it was still a fringe tool for social purposes and much more likely to see use in a work setting. It might be that VR can break into the workplace - but I have my skepticism.
I agree with you VR is not the future but AR definitely is, and even Apple has been making silent but consistent investments in AR for more than the past 5 years.
It's interesting to see the differences of opinions on this subject. I believe this will pan out in the opposite direction.
As a consumer, AR seems so weird to me. I don't want to put on glasses or goggles to see overlays of the world around me. I want interfaces to be simpler, not more complicated and crowded.
While AR hardware has improved, the software remains reminiscent of Nintendo DS Face Raiders [1]. I'm just not being sold on a day to day use case for the tech. Maybe Apple or Meta will teach us otherwise, but I can't even imagine it at this point.
I do see AR being useful for a limited number of industrial applications. You already see quasi-AR virtual film cameras working well (cameras without a lens that capture xyz-orientation in virtual space for the purpose of pointing a virtual camera). But these don't even use optical overlays.
On the other hand, VR enables infinite workspaces, telepresence, new kinds of 3D creative tools that place you inside the thing you're building, world isolation, closer to full sensory immersion, etc. Rather than a tool that serves as an overlay of the existing world, it puts you into a new type of cognitive body altogether. Metaphors of movement combined with spatial reasoning can unlock new abilities for the human brain. Like gestures, but full body and mind.
You can already see the advancement of AR software by holding up your iphone and trying out the various AR features that overlay things in the real world and can even use the depth sensor to occlude your hand. Or try out Google maps AR view which literally does a video game style overlay of the path you need to take over the actual world. Maybe you don't like these things, but I think they are objectively cool, and right now only held back by a lack of hardware to make it convenient to do AR in every day scenearios (lightweight glasses or goggles). But, Apple is working on that, and so is Meta, and since technology advances by Moore's law it's only a matter of time before the glasses get light enough and comfortable enough that we don't have to hold up our phones awkwardly in front of our faces to do AR.
Things that AR can accomplish:
1) Overlaying peoples' names so I don't have to remember so many names. Not a problem for many people but some people have a hard time remembering names. 2) Always there real world overlay of directions so you don't have to keep pulling out your phone. 3) AR games and entertainment 4) No need for giant physical 2 dimensional information displays in the real world. Once AR gets sufficiently clear and high enough resolution there is literally no need for physical displays... only virtual ones. The whole point of physical displays since inception is to show information, sometimes 3D information, on a 2D surface. We've been trying to make them smaller and smaller ever since... what better size than no size at all. 4) The whole point of any digital display is to augment our eyes with information. The ultimate display is one that is right in front of your eyes. AR is the next logical step for digital displays.
I will give you one case where I would give in, though: automatically translating and overlaying foreign text. I'd wear a set of AR goggles if it improved the experience of visiting countries that don't predominantly speak English.
As a counter anecdote, I fully support AR - the idea of Google glass would have been very appealing for me if they could actually use the lens as the screen and it was less bulky.
Perhaps it's just years of seeing heads-up displays in anime and sci-fi movies (e.g. Terminator) that's pushing my desire.
If they can eventually solve the bulk and creep issue (ie, always-on camera that can surreptitiously record at will) it will become a useful addition to the phone/watch personal nimbus of data.
Anyone who knows the digital gaming industry understands. Content is hard.
The Metaverse seems like it has Zuc supplying a vast amount of first party content, instead of integrating with third parties better to supply skins and content.
There’s really only one company in the world that’s able to do that better than anyone else. You guys know which company that is.
So it’s very very hard for them to be as successful in that space
The physical product creaks and groans, and the software UI is android level.
Tesla just has the convenience of competing with luddites
They can extend that to these voting class shares imbalances and start a cascade of changes
People who value stability and work-life balance. It's great for people who see a job as a way to fund life and put something away for security later in life, not as a calling they're willing to sacrifice everything for.
It will eventually be a problem (in the sense that switching to GOOG or AMZN will be a much better prospect) if the stock continues to go down, of course. And a new hire evaluating their stock package should probably be a little concerned about the trend.
The infrastructure to support you getting your work done is great. There are reasonably interesting software problems to solve. There are smart people to work with. There are some good benefits.
Never mind the convoluted tax implications of exercising options that are nominally not underwater, but whose stock has a lower value that at the time of granting.
If you factor in taxes, you could end up owing more in taxes than the shares are worth (ex: vest price is $10/ea, taxes are $3/ea, current price you can sell at is less than $3 == underwater).
I think Aurora employees were locked out for 180 days, but force to exercise options at IPO price.
[0] - https://www.cnbc.com/2020/08/28/nearly-200-uber-employees-su...
Think about it this way: Giving 20 billion in new equity per year when the market cap is a trillion dilutes everyone 2%. When the market cap is 500 billion you are now diluting everyone 4%.
When the company is growing you don’t see the dilution as the increase in stock price is much higher. When it’s static this drags your shares down over time.
Facebook's goal is to do whatever Zuckerberg wants, since he still controls a majority of the votes. It's a fascinating test of the value of corporate governance rights.