Re:Biggest layoffs of 2023: Firms fired employees in jaw-dro...
by WJW on Saturday December 30, 2023 @06:44AM
(#38814488)
WeWork comes to mind. Probably Tesla and most of the other electric car makers too.
The key differentiator between these and "true" tech is whether the business has:
- Very high margins. If WeWork wants to grow, they need more buildings and both renting and buying require large amounts of capital. Tesla requires a significant amount of raw materials to build a car. Google on the other hand spends almost nothing to add a new customer to the database. This lets Google grow to worldwide scale with (comparatively speaking) very low capital requirements, while the others need huge upfront investments.
- A sustainable technological advantage or network effect. WeWork is "just" the Regus business model with better branding. Tesla used to have some technological advantages but the other car manufacturers are catching up rapidly. This means that in the medium term their branding will be all they have left to distinguish themselves with, and public opinion is a fickle master. Google and Meta have really entrenched themselves in their respective markets and the network effect for both is so great that I cannot see them being dethroned anytime soon.
The key differentiator between these and "true" tech is whether the business has:
- Very high margins. If WeWork wants to grow, they need more buildings and both renting and buying require large amounts of capital. Tesla requires a significant amount of raw materials to build a car. Google on the other hand spends almost nothing to add a new customer to the database. This lets Google grow to worldwide scale with (comparatively speaking) very low capital requirements, while the others need huge upfront investments.
- A sustainable technological advantage or network effect. WeWork is "just" the Regus business model with better branding. Tesla used to have some technological advantages but the other car manufacturers are catching up rapidly. This means that in the medium term their branding will be all they have left to distinguish themselves with, and public opinion is a fickle master. Google and Meta have really entrenched themselves in their respective markets and the network effect for both is so great that I cannot see them being dethroned anytime soon.