[HN Gopher] How tech's defiance of economic gravity came to an a...
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How tech's defiance of economic gravity came to an abrupt end
Author : mastazi
Score : 95 points
Date : 2022-12-26 04:06 UTC (18 hours ago)
(HTM) web link (www.economist.com)
(TXT) w3m dump (www.economist.com)
| fragmede wrote:
| Has it? Capitalism is based on supply and demand, and where those
| two lines intersect is where the magic happens. Except that we've
| never adapted it to the reality of, well, computers and the
| Internet. The price of duplicating a pile of bits, whether it be
| a Linux ISO, Windows 11, or the latest Disney movie is
| effectively zero*. Or textbooks to spread human knowledge around.
| A graph of supply and demand, where supply is a vertical line is
| _broken_! Copyright tries to be this end run around this basic
| fact, when what 's really needed is a fundamental rethinking of
| the entire system.
|
| * Hosting a file < 10 GiB via Cloudflare's zero egress fee R2 and
| sending across the Internet, once for every human costs
| approximately $3k -
| https://www.wolframalpha.com/input?i=number+of+humans+alive+....
|
| Distribution costs via Bittorrent are even cheaper! I don't
| actually how much it costs to run a DHT node, or even who's
| paying for them today, but spreading a magnet link around is
| _really_ close to free!
| anacrolix wrote:
| I'd like to see you try to send a 10 GB file to every human on
| the planet through Cloudflare.
| Duplo wrote:
| > I don't actually how much it costs to run a DHT node, or even
| who's paying for them today
|
| By default all BitTorrent clients are acting as DHT nodes (if
| they can receive inbound UDP packets). You can disable it in
| the options, but most don't (unless for private trackers on
| per-torrent basis). I don't think anyone actually runs a DHT
| node like Tor exit nodes (except researchers and search engines
| like BTDigg).
| tsimionescu wrote:
| The supply and demand curve model is either tautologically true
| (when applied in retrospect), or essentially entirely useless
| (if you try to use it to model a future product/price).
|
| The cost of reprodcuing a pile of bits is quite unimportant
| compared to the cost of producing that pile of bits the first
| time around. This dynamic is poorly captured by supply/demand,
| and this is where copyright laws have always come in. While
| they are being abused with absurd expiry limits, they are a
| necessary part of any kind of money-based society.
|
| Without copyright, for-profit companies would insist on ever
| more draconian DRM and software obfuscation technologies to
| replicate similar systems, while liberally taking any piece of
| code they can get their hands on - whether open-source or from
| another company with inadequate copy protections.
|
| This basic problem would remain true even if all software and
| media companies were worker owned syndicalist co-ops.
| davidhunter wrote:
| The marginal costs of production are near zero effectively. The
| marginal costs of acquiring and retaining a customer are far
| from zero for a lot of overvalued enterprise saas companies.
| hestefisk wrote:
| Indeed. The economics that OP stipulate, do not factor in
| interest rate and cost of labour (engineers).
| fragmede wrote:
| Given the Internet, the cost of labor for distribution of
| digital goods over that is cheap as all hell when compared
| to the cost of labor to distribute any sort of physical
| good because first you have make copies of this physical
| good, which starts off by requiring additional raw material
| input.
|
| Say we've got this mp4 file that everyone wants. Let's use
| bittorrent for our digital distribution. So we need to:
| create a torrent, upload it, and then keep their computer
| on for a couple more hours? Let's pay $400 for the job. I
| think it's well within the realm for a clever teenager to
| do it, or a rando you find off of Upwork or Fiverr, that
| who knows what they're doing, to finish the first two steps
| in an hour, so I think that rate is plenty generous. But
| let's also pay for their Internet connection for the month
| ($100), and a cheapo laptop to do this work on ($500). This
| brings our digital distribution costs _including the cost
| of labor_ , using bittorrent, to be able to make _billions_
| of copies to be... $1000?
|
| Even if you pay an engineer to do that job, labor doesn't
| get residuals, so aren't paid for each copy made, so the
| cost of labor, whatever it is, is essentially flat.
| Compared to if you were trying to copy and distribute a
| physical good, the more copies you make, the higher your
| costs and $1000 just isn't going to get you far at all.
|
| I'm more interested in what you mean by interest rate
| though, mind explaining how that fits in here a bit
| further?
| UncleEntity wrote:
| Your cost analysis totally overlooks the cost of
| producing the "mp4 file that everyone wants".
| grog454 wrote:
| It also seems to overlook the typical expectation of non-
| zero revenue.
| mrhektor wrote:
| https://archive.ph/MmQ3Y
| ram_rar wrote:
| https://archive.md/MmQ3Y
| imtringued wrote:
| Isn't it kind of odd how everyone shouts that inflation is good
| for stocks, etc when the Fed is known for raising interest during
| times of high inflation?
|
| By that I mean if something grows faster than inflation plus
| earnings and it is an inflation hedge or at least the revenue is
| dependent on inflation and therefore it's valuation grows with
| inflation, then it must come down at some point and here is the
| kicker, only businesses that actually manage to sell products and
| generate revenue are actually benefiting from that inflation. So
| when faced with higher interest rates, only those business will
| have an easy time.
|
| So what matters here is nominal revenue and nominal interest, not
| the actual real interest rate. 4% interest at 8% inflation still
| has a big impact, even though in real terms it is still negative.
| Haga wrote:
| [dead]
| mkl95 wrote:
| One of our non unicorn competitors just raised ~200M in a niche
| where 100M+ seed rounds are usually something you raise after you
| become a unicorn in a series D or something. There still are
| crazy investors out there but they are crazy about more specific
| things than say three years ago.
| sokoloff wrote:
| How much did they sell for that $200M? (They have to be at
| least close to unicorn unless they sold well over a typical
| amount in that round.)
| mkl95 wrote:
| They are close to unicorn. But last time I saw a similar
| company raise that kind of money their valuation was ~1.3bn.
| ed-209 wrote:
| This impending downturn is why I've tolerated a most unsexy
| project reassignment from my current employer over the last 9
| months. Instead of data-driven green-fielding in AWS I've been
| brown-fielding in Azure where the current priority is dictated by
| the shifting demands of a single large customer. This all
| promises to be a nightmare if product doesn't realign and snap
| out of their identity crisis.
| ianai wrote:
| Here's a Fed analyst policy briefing on market valuations today
| and going forward:
| https://www.federalreserve.gov//econres/notes/feds-notes/the...
|
| It's an insight into how they're thinking for one. For two, the
| conditions that led to the current economic situation are
| unlikely to be present in the future. In many cases those
| situations can't be reproduced because they would require highly
| unlikely situations (another pandemic) or impossible situations
| like the fed going to negative interest rates or near zero tax
| rates.
|
| Further, population growth is one solid, bedrock economic growth
| truism. Some of this could be ameliorated by the US taking a
| "send us your weak, your poor, etc" mindset to immigration. This
| is how things were pre-2010, ish.
| fallingknife wrote:
| Population growth is great for GDP growth, but not necessarily
| quality of life.
| ngoilapites wrote:
| Define economic gravity.
| screye wrote:
| I believe the doom-n-gloom around all of tech is rather
| overblown.
|
| There are sectors of tech that will absolutely struggle. Gig-
| economy companies won't ever meet their valuation. Negative PE
| ratio startups are realizing that hyper-scaling is not as
| infinite as they believed, and that means their earnings might
| never catch up to their price. Social media companies are finally
| facing stiff non-American competition (Tiktok). Lastly, it is
| nice to see the crypto scams be snuffed out. But, people have
| been calling all 4 of these out since before Covid.
|
| Now, the biggest movers in tech seem to be in a healthy position.
| AMZN*, MSFT, AAPL and GOOG sit comfortably at the same average PE
| ratio as the S&P500. Those are value stock numbers for companies
| that are all leading innovation while having solid unit
| economics. They are front runners in areas that are their biggest
| risks (AI, Silicon) and their current offerings are essential
| tools to everyone globally. AFAIK, the adoption rates for cloud
| compute and mobile-silicon devices is only going to go up from
| here.
|
| _[AMZN] - AMZN does the weird profit-reinvesting thing, so they
| report lower margins on the highest revenue across tech. Thus the
| lower PE ratio. See it as you wish._
| birdymcbird wrote:
| Overly rosy take on big tech. I'll use Google as example. Their
| execs are in full panic right now over OpenGPT.
|
| What was last major innovation at Google.. chrome? 20% of
| company drives profits while 80% is a decorated R&D lab chock
| full of benefits, upset about cutbacks in their free oatmilk
| lattes, even though they're not coming to office anyway.
|
| these guys will double their attrition targets if not have full
| blown layoffs. ads drives their profits, but search has been in
| decline for years now.
|
| google right now is a bloated bureaucratic whale that needs to
| hit the gym and get in shape. Step 1 is to get off the damn
| couch.
| shubhamkrm wrote:
| > What was last major innovation at Google.. chrome? 20% of
| company drives profits while 80% is a decorated R&D lab chock
| full of benefits, upset about cutbacks in their free oatmilk
| lattes, even though they're not coming to office anyway.
|
| Transformers were invented at Google, which is the underlying
| tech on which GPT is built. I would say that counts as
| innovation.
|
| See: https://en.m.wikipedia.org/wiki/Transformer_(machine_lea
| rnin...
| mjr00 wrote:
| > What was last major innovation at Google.. chrome? 20% of
| company drives profits while 80% is a decorated R&D lab chock
| full of benefits, upset about cutbacks in their free oatmilk
| lattes, even though they're not coming to office anyway.
|
| This has been a major part of the FAANG strategy: crush
| competition by giving people who might work for or become
| potential competitors an offer they can't refuse. 80% of the
| company ostensibly produces minimal value, but the real
| reason you're giving them huge compensation and oat milk
| lattes is to make sure they don't work for, or found, a
| Google competitor at some point in the future.
|
| This has led to a perpetual feedback loop: FAANG company
| gives their engineers big stock grants, which ensures no
| competition in their markets, which increases the value of
| their stock due to no competition, which allows them to hire
| more engineers with big stock grants, etc...
|
| We're suddenly entering an era where FAANG stocks _aren 't_
| continually moving upward. This is largely unprecedented
| territory; these companies have never experienced an extended
| downturn since this became the industry hiring strategy.
|
| If the recession continues through 2023, I would not be
| surprised to see these companies abandon this strategy and
| only retain necessary talent. Would not be surprised to see
| 50%, even 75% staff cuts at Goog and Meta specifically.
| FormerBandmate wrote:
| What is ChatGPT's actual competitive advantage over search?
| It can't tell you the second largest country in South America
| correctly, it's an extremely cool demo but I can't think of
| anything it could replace Google for. The underlying
| technology is extremely powerful, but it's been powering
| Google for years
| browningstreet wrote:
| How do you know Google execs are in full panic over OpenGPT?
| olliej wrote:
| someone on the internet said they were :D (there was some
| article on HN the other day. Personally I suspect this is
| just standard over exaggeration by reporters dependent on
| page views)
| goldenchrome wrote:
| You underestimate the staying power of monopolies.
| fzzzy wrote:
| Like AOL and MySpace?
| goldenchrome wrote:
| No, like Exxon and IBM.
| birdymcbird wrote:
| No, but i think you do have a point. Googles board and
| company execs had convinced themselves they're an
| untouchable money printing machine. This year, they've been
| violently woken up.
| goldenchrome wrote:
| They have tens of thousands of top engineers, billions in
| the bank, half a dozen products used by over a billion
| people and their main product is ads for people who use
| the internet. Companies always face existential threats
| but as far as moats go, Google has one a mile wide. Their
| downfall will be slow and obvious and even after their
| decline in cultural relevance they'll still churn out
| billions of dollars a year.
| dimator wrote:
| Why are they in a panic over ChatGpt? Don't they have similar
| research and tech around these AI systems?
| birdymcbird wrote:
| 80% of their revenue comes from ads, which is google
| search. Chatgpt and any other startup who invests in
| something like chatgpt can upend googles core business
| model.
|
| and no, google doesn't have anything significant in this
| space. "Innovation" behind search was to slowly increase
| no. if paid ads in your results, driven by need to increase
| revenue and keep the rest of the 80% of biz afloat.
| screye wrote:
| > and no, google doesn't have anything significant in
| this space
|
| LAMBDA and PaLM are literally the answer to Chat-GPT.
| Google is their closest competitor.
|
| I do agree that they will lose their moat, and soon
| Google search will just be another tool among many.
| lossolo wrote:
| And Google developed LaMDA model (superior to chatGPT) a
| lot of time before OpenAI, additionally without their
| research into transformers and publishing results, OpenAI
| would probably not even have ChatGPT now/yet.
| shubb wrote:
| Something I find very curious - Google are doing the same
| kind of research and are in many ways futher along. They
| have thier own models like T5 that supposedly perform
| better. Are their exec unaware of their own strengths?
|
| For that matter, wasn't Google collecting masses of GIS
| data and doing intense self driving car research? Where is
| that product?
|
| Serious q - do google have so much money that they are
| doing tons of research and then just forgetting to make a
| product out of it?
| csande17 wrote:
| > For that matter, wasn't Google collecting masses of GIS
| data and doing intense self driving car research? Where
| is that product?
|
| https://waymo.com/
| EGreg wrote:
| You forgot the biggest one.
|
| Advertising revenue. That's what Facebook and Google were
| supported by.
|
| And it has been a zero sum game in a race to the bottom for
| years. They just didn't diversify much, same as Russia or
| Venezuela with their oil economies.
|
| Most companies built around zero-sum games are eventually going
| to stop growing as you run out of other people's money. But
| that's OK -- they are already HUGE!
|
| The real problem is the public stock market (also a zero-sum
| game, mostly) creating a bubble and pushing them to extract
| rents from their ecosystem harder and harder. It's fine to
| raise money in order to grow, but investors end up reselling
| shares for more and more money and represent a class of people
| who extract rents from a multi sided market.
|
| (By contrast, true utility tokens pegged to the dollar that can
| be sold to actual customers and are a way to raise money that
| is more economically sustainable and doesn't create speculative
| bubbles.)
| MilStdJunkie wrote:
| There's a general fear that customers eventually will realize
| that the Google / FB ad dollars aren't actually creating new
| business. These gatekeepers - the Googles/Apples/FBs/etc -
| can predict where consumers are about to go[1], but the total
| numbers don't go up.
|
| It's sort of like the difference between coupons in the local
| paper, versus coupons that your ad man hands out next to the
| front door of your business. Everyone who gets a coupon was
| coming here anyway.
|
| The dark side of this is how your business can suddenly
| disappear from view if you stop buying into the Web-Ad-Hive-
| Mind. That's way worse than the coupon guy hanging outside
| the front door - that's more like someone in fake
| construction vests putting up cones around your parking lot.
|
| [1] Giving them something that looks like magic powers to
| individual businesses, particularly those that aren't
| particularly computer savvy. "Holy smokes!! 95% of the people
| who Google reaches went to my pizza place! They must be
| soooooo good at convincing people my pizza's the best!"
| FormerBandmate wrote:
| > The dark side of this is how your business can suddenly
| disappear from view if you stop buying into the Web-Ad-
| Hive-Mind. That's way worse than the coupon guy hanging
| outside the front door - that's more like someone in fake
| construction vests putting up cones around your parking
| lot.
|
| Soooo... ads provide substantial value to businesses?
| EGreg wrote:
| In the same way a protection racket provides substantial
| value to them as well. But only if the platforms mess
| with their rankings on organic listings and ratings
| depending on how they pay for ads.
|
| Yelp likes to do that, for instance. Alternatives to ads
| include:
|
| Referrals / word of mouth
|
| Organic rankings
|
| In a way, ads are similar to speculators pumping a token
| they think will eventually justify the hype by recouping
| the speculative spend. There are diminishing returns the
| bigger the ad spend gets.
|
| The only difference is that there is no secondary market
| to keep reselling ads and scalping them higher -- or is
| there? But there is certainly the element of a large
| supply of greater fools to try out ad spend on various
| speculative ventures.
| haliskerbas wrote:
| Search ads and social ads are two different games I would
| say.
| EGreg wrote:
| Either way, it's a zero sum game. The productive sectors of
| society (businesses with goods and services) spend on
| advertising to attract customers away from each other. The
| majority who don't have massive budgets for optimizing soon
| realize the ROI is negative on ad spend, and stop. Same as
| traders who get liquidated after trying futures.
| asah wrote:
| And google didn't fail to diversify for a lack of trying
| !!! It's just that ads continued growing faster than
| anything else could catch up.
| [deleted]
| lumb63 wrote:
| I agree that those companies are in "a healthy position", but
| there are massive risks to their operations:
|
| AMZN: IIRC, AWS is the majority of their profit. This is web
| infrastructure; all the negative PE ratio startups and gig
| economy companies going under will hurt AWS. They have similar
| risks to GOOG (see below).
|
| MSFT: Does anyone have a clue how MSFT is making money? The
| last few Windows updates have been free, and I would guess they
| are buttressed by Office 365. How they convince IT departments
| to adopt this buggy, slow, expensive software, is beyond my
| comprehension. What's the sales pitch? "Hey, have you ever
| wished you could pay every month for Office? It will have
| similar functionality to Office from 20 years ago, and you can
| pay us every single month!"
|
| On second thought, their Azure services probably have similar
| profitability and risks to AWS; maybe that's what is keeping
| them afloat.
|
| AAPL: At least Apple produced physical products, but we have
| seen their products, e.g the iPhone 14, hurt by supply chain
| issues and lower demand in the face of a recision and high
| inflation. They're not innovating; the iPhone 14 was mocked for
| being the same as the previous model. If frugal consumers go by
| the wayside, who is driving profits? The (now-laid-off) tech
| employees who make enough to afford their luxury products?
| Maybe some, but less than at present.
|
| Apple has made efforts to grow their SaaS revenue the last few
| years and that is prone to risks from lower consumer demand. A
| budget-minded consumer will not be paying for all the Apple
| services when they are hurt by layoffs.
|
| GOOG: Ah, my favorite. Let's set aside the legion of small
| companies they bought to fuel growth and decrease competition,
| e.g. Nest, Fitbit, Waze, YouTube, etc. Corporate Alphabet is
| producing the majority of profit by ad revenue. What happens
| when demand for advertising decreases due to lower consumer
| demand? They're also trying to enter the cloud space, but are
| far behind AWS and Azure.
|
| There are also broad risks facing tech company. The main ones
| which come to mind are data privacy and other regulations,
| anti-trust actions.
|
| If future events do not favor big tech, those companies could
| have a long way to fall.
| Tanoc wrote:
| As far as I know for Microsoft, a large chunk of their
| revenue comes from the licensing for Visual Studio, the Azure
| service and the fees required for certification, and
| surprisingly the Xbox division. Corporate entities buying
| licenses for Visual Studio would likely be tens of thousands
| of dollars each since the Enterprise level license starts a
| little under two grand. And Xbox with it's recent push into
| mobile style games likely makes Microsoft unimaginable
| amounts of money. Roblox in 2021 is estimated to have made
| $1.9b based on it's microtransaction model, and Microsoft
| gets a cut of that. The FIFA games generate an average of
| $1.5b every year. With the recent acquisition of Activision-
| Blizzard and thus mobile giants like King Games, it's likely
| that Microsoft could rake in $30b a year from the Xbox
| division, an increase of seven or eight billion. And with the
| autonomy model of the owner, publisher, developer ladder
| Microsoft likely has to do little to no investment as the
| parent company in order to receive that income.
| givemeethekeys wrote:
| When the DotCom bubble burst, and after 2009, traffic in the Bay
| Area cleared up. Commuting time got cut by half. Homes in many
| neighborhoods, apart from the very best school districts, became
| attainable.
|
| This has yet to happen. Unemployment is still quite low. The
| music is just starting.
| starkd wrote:
| Is unemployment still really low?
|
| Job growth was less than it was originaly reported. By a lot.
| From 1M to just 10K.
|
| https://nypost.com/2022/12/22/biden-administration-overstate...
| oldgradstudent wrote:
| > When the DotCom bubble burst, and after 2009, traffic in the
| Bay Area cleared up. Commuting time got cut by half. Homes in
| many neighborhoods, apart from the very best school districts,
| became attainable.
|
| It was the same in 2001, BTW.
| auggierose wrote:
| DotCom bubble == 2001
| oldgradstudent wrote:
| Hmm, how did I miss that?
| Kye wrote:
| I think those of us who lived through the 90s and 00s
| have a hard time counterdiscombobulating all the stuff
| that went down. People who experienced the 60s and 70s
| probably have similar difficulty.
| Apocryphon wrote:
| Software ate the world. The years since the Dot-Com
| Bubble burst is like if the interstate highway system was
| built _after_ the recession of the 1970s. The Factory
| Belt wouldn't have become the Rust Belt if that had
| happened.
| chestervonwinch wrote:
| > counterdiscombobulating
|
| what a discombobulating way to say "clarifying" :)
| ghaff wrote:
| The worst downturns tend to be at least somewhat sector
| dependent. There has been at least one aerospace downturn
| when PhDs were driving cabs in Seattle.
|
| In the dot-com crash, a lot of people in software
| especially left the industry and many never really got
| their careers back on track or recovered financially. On
| the other hand in 2008/9, there was belt tightening in
| the software industry but overall the impact didn't end
| up being all that great. Remains to be seen if this
| period will be the former or latter. Of course,
| individuals can still be very affected even if the
| overall impact isn't huge.
| lovich wrote:
| Too much eggnog
| spaceman_2020 wrote:
| The dominant narrative among investors and funds, at least in
| my domain (web3, tech investing) has been that "Fed will pivot
| soon, and the party will start anew".
|
| As long as that narrative remains strong, nobody will dump
| everything. New investment might stall, but no panic in the
| ranks.
|
| The real panic will set when the pivot does not happen. Or if
| it does happen and inflation comes roaring back, leading to a
| longer and deeper rate hike.
| birdymcbird wrote:
| "Soon" is mid 2024 at the earliest. The start ups haven't
| really even begun to trim fat. Big tech like amazon, meta,
| google will increase attrition targets in addition to actual
| layoffs.
|
| I could turn out to be wrong but id bet there's many more
| waves of cascading pain before before things turn other way.
| Turning other way doesnt mean we immediately go back to
| excess hiring, empire building, lack of focus, free uber
| rides and oat milk lattes.
|
| will be long while before market turns in favor of employees.
| fosk wrote:
| Contrarian signal, for the sake of having a conversation:
|
| - I think we will experience a massive deflationary bust.
| The inflation narrative is over, it's all about a potential
| recession now.
|
| - By Summer 2023 we will experience YoY deflation and the
| Fed will cut then, or even sooner in anticipation to that.
|
| - We may see hikes pausing as soon as February, and cuts
| starting in the summer as a result of rapid disinflation
| (which may turn into deflation). Deflation is a lot worse
| than inflation.
|
| - We find out that the bulk of inflation was indeed caused
| by supply chain bottlenecks. As China fully re-opens, those
| will be resolved.
|
| - Russia's war with Ukraine will end (Putin is now agreeing
| to potentially think about negotiations). Oil prices will
| ease
| KptMarchewa wrote:
| >Putin is now agreeing to potentially think about
| negotiations
|
| This is as red herring as it can be. No remotely serious
| analysis of this war can take anything Kremlin says at
| face value.
| ChuckNorris89 wrote:
| _> Russia's war with Ukraine will end (Putin is now
| agreeing to potentially think about negotiations)_
|
| "Potentially think about negotiations" is a long long way
| from the war ending.
|
| Also Putin's terms are absurd. He wants to keep half of
| Ukraine while evading persecution for the crimes against
| humanity the Russian army caused against civilian
| population.
|
| That's not gonna fly in Kiev, who wants all their
| territories back including Crimea, and the guilty parties
| held accountable at the Hague for their crimes, plus war
| reparations being paid, which is not gonna fly in Moscow.
| coffeebeqn wrote:
| Putin would want "peace" only to have more time to build
| up his army and continue the invasion in 2-5 years. It's
| insane how naive some people are still about russias
| intentions after everything they've done
| api wrote:
| A decent chunk of the right isn't naive. They want Putin
| to win because he's a traditionalist and they love strong
| man rulers.
| candiddevmike wrote:
| China is being ravaged by COVID right now, your
| bottlenecks are going to get a lot worse before they get
| better.
| p_l wrote:
| > As China fully re-opens, those will be resolved.
|
| "Reopening", and caused by it pandemic speedrun is
| already bringing back more supply chain disruptions
|
| > - Russia's war with Ukraine will end (Putin is now
| agreeing to potentially think about negotiations). Oil
| prices will ease
|
| Putin is trying to "win" the war by insisting on talks
| where they keep the territory. Anyone looking closely
| knows that's not going to be accepted even as a premise
| to start talks.
| cjbgkagh wrote:
| Putin was always willing to negotiate and there have been
| attempts at negotiation before and during the conflict,
| what matters are the pre-conditions to negotiations. If
| the pre-conditions are too strong then in effect it
| blocks negotiations and it means the overtures to
| negotiate are simply done for political reasons. We're
| being told that only now Putin is ready to negotiate so
| I'm assuming that means the pre-conditions have weakened
| but I'm having a hard time finding out what that change
| is. Maybe they've given up their demand for a de-
| militarized Ukraine? The ban from entry to NATO?
|
| We're also being told that this willingness to negotiate
| is a sign of weakness and eminent failure for the
| Russians so Ukraine shouldn't negotiate and should
| instead press their advantage.
|
| In effect we should not negotiate with people who are
| not-willing to negotiate nor with people who are... which
| only makes sense if we never intend to negotiate - a
| position that's much easier to hold when we're not paying
| the price of the failure to negotiate.
| candiodari wrote:
| Of course both sides have preconditions:
|
| 1) Russia: for Ukraine to accept territorial concessions
| (Donbas + Crimea)
|
| 2) Ukraine: for Russia to retreat from all Ukrainian
| territory, (maybe) except Crimea (meaning they're willing
| to sit down at a negotiation table without the Russians
| agreeing to retreat from Crimea)
|
| So the two sides are far apart. Russia is judged weak
| because the prediction is that without negotiations they
| will lose all territory inside Ukraine. They are
| _dependent_ on negotiations, and unwilling to accept the
| reality that they 've lost the Donbas (Luhansk and
| Donetsk), Kherson, _and_ Zaporizhia, and are unlikely to
| be able to hold Crimea in the long term.
|
| Furthermore, Russia has consistently failed to
| demonstrate capabilities they threatened Ukraine with.
| They claimed to be able to take Ukraine "in 2 weeks,
| maybe less"
| (https://www.youtube.com/watch?v=h_RReQj7PpY), they
| claimed they couldn't be stopped in the Donbas. They have
| been stopped. They have been claiming for 40 years to
| have the tightest air defense network on the planet. The
| air defense network couldn't stop drones (which are
| unmanned planes, designed to fly slowly), not even with 6
| WEEKS warning. They have panicked and deployed additional
| air defense platforms _around Moscow_ , in other words,
| they're afraid they cannot protect _the Kremlin_ from
| Ukraine 's military, 450km from the nearest Ukrainian
| border whilst they cannot (effectively) hit Kiev's
| presidential palace, at 200km from their borders, and
| less than 70 from their deployed soldiers in Belarus.
| This is not the way to show strength.
|
| They are known, even long before this conflict, to
| constantly lie about everything, to ignore agreements
| made before. So it's not even very clear what an
| agreement with Russia would even entail. If they say they
| won't attack, they can't be trusted to uphold the
| agreement. So what's the point? There must be a good
| military reason for them not to attack or there's no
| point.
|
| Or to put it in negotiation parlance: BATNA for Ukraine
| is better than the conditions Putin demands to even talk.
| Nevertheless, these aren't small organizations: whether
| or not they've agreed to talk high-level, they're
| constantly talking.
| bee_rider wrote:
| The US of course isn't in a position to negotiate, since
| we aren't actually in the conflict. We'll just keep
| sending weapons to Ukraine so they have as strong a
| position as they can get.
|
| Ukraine is defending so... I dunno, I guess they aren't
| very motivated to make concessions. I guess the starting
| point for negotiations for them would be Russia leaves,
| and then the details of where on the spectrum from "huge"
| to "massive" the reparations are can be worked out.
| cjbgkagh wrote:
| The US is funding the Ukraine defense and has a enormous
| influence on negotiation. They are effectively a first
| party.
|
| If people don't want to negotiate that's their
| prerogative. I'm more interested in the difference
| between what I'm told by media and reality, and more
| precisely if there has been a softening of Russias stance
| I want to see where.
| bee_rider wrote:
| In order to negotiate, both parties need to be able to
| offer concessions. What concessions could Russia possibly
| offer the US, related to the Ukraine situation, that the
| US would be motivated to take? Our people aren't dying
| and our territory isn't threatened. Because we're, as you
| pointed out, not paying the price for the conflict, we
| don't have any incentive to try and stop it... we can't
| negotiate in good faith because we don't have any chips
| on the table.
|
| We can influence the Ukraine/Russia negotiation of
| course, by increasing or decreasing our support for
| Ukraine. But, since they seem to be willing to continue
| fighting, decreasing aid would be a pretty huge betrayal.
| birdymcbird wrote:
| > we don't have any incentive to try and stop it
|
| Inaccurate. Russia is getting backed into a corner, where
| they believe the wests goal has been to destabilize and
| break Russia all along. The more desserts they get more
| likely they are to use a thermonuclear weapon in Ukraine.
|
| The increasing probability of nuclear war should be
| sufficient motivation for america to broker a peace deal.
| Instead we're sending more weapons to Ukraine.
|
| The media narrative has removed the 20 decades of context
| on how we got here. Focusing only on what's happening
| now, the narrative is that Russia is motivated by some
| strategy to conquer Europe and any different perspective
| means the person is stupid or a Putin shill.
| throwaway_75369 wrote:
| > The more desserts they get more likely they are to use
| a thermonuclear weapon in Ukraine.
|
| I'm still confused when people assert there's any chance
| Putin will use a nuke in Ukraine.
|
| I'm far from an expert on Russian politics, so I imagine
| I'm missing something in terms of reputation or
| intimidation or face saving, but I always figured that
| Russia wanted to own/control Ukraine, since it's a
| fertile, resource-rich part of the former USSR (it's a
| huge grain exporter; consider all the famine warnings
| since the war began?)
|
| Why would they choose to destroy this thing they want to
| control? Using a thermonuclear weapon specifically seems
| really counter-productive. If I stretch I could imagine a
| future where they deploy some tiny tactical nuke for
| intimidation/escalation, but same logic applies, I don't
| think they want to destroy the thing they're trying to
| conquer, so they'd want to limit collateral damage.
| birdymcbird wrote:
| > I always figured that Russia wanted to own/control
| Ukraine, since it's a fertile, resource-rich part of the
| former USSR (it's a huge grain exporter; consider all the
| famine warnings since the war began?)
|
| This isn't the motivation. Putin has been saying since
| 2007 that NATO expansion is an existential threat to
| Russia. Now whether we agree with that or not is besides
| point. They view it that way.
|
| They warned in 2007 Ukraine entering NATO would lead to
| war, but we basically told Russia that there a has been
| and they don't matter. This led to what happened in 2014.
| Then in 2021, we basically come out in full support of
| pulling Ukraine into NATO.
|
| What's happening now is extremely dangerous. Russia can't
| win in Ukraine because of west helping Ukraine and their
| economy is ruined after sanctions. They see this as an
| end of Russia.
|
| You're backing them in the corner. This is when rational
| state actors act irrational. The chance of thermonuclear
| war is increasing because Russia cannot take on the west
| in a conventional war.
|
| We had a significant role in how we got to this war, but
| we won't ever take responsibility. We pulled out of
| Afghanistan and now the military industrial complex is
| making billions through Ukraine.
| cjbgkagh wrote:
| The US is spending a great deal of money, those are
| chips, and not having to spend money is a concession.
| Your framing of the situation makes little sense to me
| and appears to be angling towards the conclusion of
| unlimited support for Ukraine until their 'inevitable'
| victory. I'm less optimistic about Russia collapsing and
| also not optimistic about America's continued support for
| Ukraine, they wouldn't be the first country to be
| abandoned by the US. The aim is to give Russia a bloody
| nose and deny them an easy victory not for Ukraine win
| the war. "To be an enemy of America can be dangerous, but
| to be a friend is fatal." - Henry Kissinger
| ROTMetro wrote:
| Of the USAs 700 Billion yearly defense budget, we spend
| around 150 billion to contain Russia, and we've spent
| that or more since the 1950s (so over 10 trillion
| dollars). We aren't spending new funds to support
| Ukraine. Most of the 'spend' so far has been moving
| numbers from under 'In XYZ DoD warehouse' to 'Transfered
| to Ukraine' in an accounting spreadsheet. When we are
| sending Ukraine more than 150 billion a year and
| exceeding what we typically spent on containing Russia
| then America might START to think about the costs of this
| war. Maybe we should be scared the we no longer have a
| surplus of Javelins in case we need them to blow up
| Russian tanks, because they have been used to...blow up
| Russian tanks...but that's a hard fear to sell.
| bee_rider wrote:
| I agree that fundamentally this is an expense that we can
| keep up for quite a while, but I'm not sure about the
| idea "these weapons are to contain Russia, therefor we
| don't have to worry about using them to contain Russia"
| for a couple reasons.
|
| First, hypothetically is the US were to fight Russia,
| we'd use a different mix of weapons. So it is putting
| unexpected pressure on our supply of Javelins, because
| they are doing the work that would normally be done by,
| whatever, JDAMs or something.
|
| Also there must be some of what we programmers would
| think of as oversubscription or deduplication of weapons
| -- I mean if we have like 2 war's worth of weapons to
| handle all our competitors and we expend one war's worth
| of weapons to handle one competitor, then we suddenly
| only have one war worth of weapons to handle all the
| rest. We haven't expended one war's worth of resources on
| Russia but it is worth keeping in mind that this isn't
| like, literally zero cost or something like that.
|
| Edit: also another thing that rubs me the wrong way with
| this description is, it seems to play into the narrative
| that Russia and the US never could have gotten along. The
| real hope is that the overwhelming US lead has a
| deterrent effect on countries that might want to start a
| war. The best weapons are ones that don't get used.
| cjbgkagh wrote:
| With diplomacy we could have turned those tanks around
| and sent them into China. Like what was done in WWII but
| for Germany. From the very onset of WWII Churchill
| smartly appeased Russia in an effort to get Russia to
| flip and it worked. China is the burgeoning hegemon and
| the real risk the US dominance. From memory the impetus
| for the conflict was China sharing US intel about plans
| to militarize Ukraine with Russia in order to goad Russia
| into the conflict. Now China and Russia are inseparable.
| This will make the future conflict over Taiwan infinitely
| more difficult.
|
| Right now the EU is bearing the brunt of the economic
| costs and they're not wealthy so they'll run out of money
| sooner. But ignoring the money spent costs; what is being
| discovered in this war is the efficacy of mass low cost
| long range drones. It's unlikely to ever be cost
| effective to defend against this and conflicts settled
| this way will be immensely destructive. I remember when
| it was unthinkable to militarize drones to remotely kill
| people from a long way away, then we did it, and soon
| it'll be done to us.
| bee_rider wrote:
| There definitely is a limit to US support for Ukraine,
| but currently Ukraine's only hope is that Russia's
| willingness to fight will run out before either US
| support or Ukrainian willingness to fight does. So,
| hopefully we've had serious discussions behind closed
| doors with Ukraine about how far we're willing to go. But
| signaling that publicly would weaken Ukraine's position
| (by giving Russia a light at the end of the tunnel).
|
| My understanding of the situation is that realistically
| the US has a lot of latitude to influence Ukraine, but
| should not go behind their back and negotiate with
| Russia. Any diplomacy that routes around Ukraine means
| their priorities will be given less emphasis. Since they
| are the ones actually paying in blood and human
| suffering, we owe them deference when it comes to when
| and how to negotiate. We're spending money but it is the
| sort of spending we can handle for a while.
| cjbgkagh wrote:
| As my quote points out, the US has a long history of
| abandoning 'friends' after they've outlived their
| usefulness. I'd be surprised if Ukraine is any different.
| bee_rider wrote:
| Sure. That US support isn't actually infinite is
| something Ukraine will have to account for. But it is
| something that we should handle with them behind closed
| doors.
| danaris wrote:
| Putin's version of "negotiations" has always been "give
| me what I want, and I might not kill thousands of you."
|
| If Ukraine is "pressing its advantage", it's to take back
| the territory that Russia has illegally attempted to
| annex.
|
| Please stop spreading Russian propaganda.
| birdymcbird wrote:
| Which part of ops statement is Russian propaganda?
|
| At the onset of the current war, Russia and Ukraine met
| in Turkey immediately to begin diplomatic talks. You do
| realize we intervened and told Ukraine to walk away?
|
| This whole narrative that Putin is irrational, that
| Russia is just plain evil, and any contrary perspective
| is "Russian propaganda" reminds me of 2003 when
| questioning the Iraq war effort would get you labeled as
| a terrorists sympathizer.
|
| This war is far more nuanced than the US government-
| backed narrative being pushed in the mainstream media.
| That itself is propaganda.
|
| And what's truly embarrassing is people like yourself
| actively try to shut down any discussion or contrarian
| views. If it doesn't conform to your view of the world,
| it's propaganda.
| voisin wrote:
| > The inflation narrative is over, it's all about a
| potential recession now.
|
| You can have stagflation: a recession with inflation.
| This is the economic boogeyman that literally every
| central banker has worried about for his or her entire
| career. Inflation is certainly not "over" - still running
| extremely hot relative to the last decade. Better than
| before the rate hikes, but by no means good or over.
| cmmeur01 wrote:
| Any normal time period would be considered "extremely
| hot" compared to the last decade+ of artificially low
| rates.
| voisin wrote:
| Can you expand on why you think inflation was
| "artificially low"?
| danaris wrote:
| I read it as the _interest rates_ being artificially
| low...
| voisin wrote:
| Ok but then if interest rates were artificially low, then
| you would expect inflation to be artificially high but it
| wasn't (at least by official measures). So the parent
| commenter is saying anything would be extremely hot given
| the last decade plus of artificially low rates, which is
| the exactly opposite result from what one would expect.
|
| (which begs the question: what does it mean to be
| artificially low? Compared to what?)
| willcipriano wrote:
| Right after the election, we learned that the employment
| numbers turned out to be cooked
| (https://www.cnbc.com/video/2022/12/22/philadelphia-fed-
| sugge...) that was in large part the justification for the
| rate hikes, I think they end in the next few months and
| start to decline this year.
| spaceman_2020 wrote:
| My belief is that the moment rates start going down,
| there's going to be another massive asset bubble which
| will create tremendous inflationary pressure.
|
| Historically, inflation has never come down so fast or so
| easily anywhere. So much of inflation is about belief and
| psychology. If a "good times are here again" belief takes
| hold, it's entirely possible that inflation will run
| amok, again.
| prottog wrote:
| > there's going to be another massive asset bubble which
| will create tremendous inflationary pressure
|
| Asset bubbles don't necessarily turn out in cost-of-
| living inflation, as we saw in the era of QE after 2008;
| it was inflationary for asset values, which kept on
| climbing, but prices goods and services were stable,
| remaining under the 2% target rate in the decade between
| 2009 and 2019.
| danaris wrote:
| A significant chunk of current inflation is flat-out
| corporate greed.
|
| This can be seen from the fact that companies are posting
| _record_ profits...while also saying "but we have to
| raise prices 20%, because of 7% inflation!"
| voisin wrote:
| > Or if it does happen and inflation comes roaring back,
|
| This happened in the late 70s/early 80s. Volcker made this
| mistake and had to jack rates a second time leading to a
| second recession deeper and longer than the first.
|
| The current Fed has referred to this in recent speeches. I
| don't think they'll make the same mistake.
| nemo44x wrote:
| Agreed. Powell's recent comments about staying the course
| contrasted with sudden expectations they may stop raising
| rates now. He sounds serious about not making that mistake.
| However, he's likely making sone other mistake we can't be
| sure about but will reveal itself down the road.
| ngoilapites wrote:
| I do not see any reason to think FED will pivot in a 2-3 y
| horizon.
| jotorTheOlord wrote:
| Let's hope the inflation comes back and deeper rate hikes
| destroy SaaS.
|
| It's rent seeking. The internet does not need landlords.
|
| Technology is great, discovery is great; politically correct
| economic traditions of enabling a minority that can email
| 20-30 minutes a day and fuck off to the beach with their
| friends was a huge problem.
|
| The rest of society will not tolerate austerity for them and
| privilege for prince and princess billionaire heirs as
| generational churn reshapes political power.
|
| Our statistical tools are curious indeed but the wrong tools
| for management of living, breathing, beings, and humans have
| a long history of belief in false prophets that we barely
| just consciously began moving away from (Vint, Gates, Jobs;
| they did not invent computing or even transmitting coded
| signals as electrons through a medium). It's a hard sell our
| leaders steeped in a less tolerant, post war shell shocked,
| Cold War paranoid era, huffing leaded gas fumes, are of "the
| right stuff" to still dictate our agency.
| ralph84 wrote:
| Agreed. I was here through both of those periods and the bottom
| wasn't in until the prevailing mood in the Bay Area was that
| tech was over, or at least the Bay Area's dominance of tech was
| over. We're nowhere near that level of despair yet.
| kingkongjaffa wrote:
| M&A and Private equity activity is down at the moment but it's
| only down from the record high of post-covid liquidity.
|
| We had a year of uncertainty and semi stockpiling and then when
| the recovery steps were clearer a huge amount of pent-up
| investment happened in the following 12-18 months.
|
| Sentiment is mostly negative right now but deals are still being
| made, where they make sense.
| lmeyerov wrote:
| There is down and there is cratered 80% YoY:
| https://news.crunchbase.com/venture/global-vc-funding-monthl...
|
| So the question is what happens to VC-dependent companies - do
| exuberant times return and they continue their addiction, do
| they do even deeper cuts, wash out, ...?
| benreesman wrote:
| Alternate hypothesis: tech is still a great sector but as
| monetary policy has moved away from "money printer go brrr"
| growth equities have predictably been hit harder than most.
|
| We were running ZIRP and some insane level of QE that's a bit of
| a puzzle to even measure. Yeah, equities markets were more than a
| little overheated.
|
| The notional values may have re-scaled a bit but I'll go out on a
| limb and venture that Alphabet is still a great business.
| patientplatypus wrote:
| [dead]
| RyanShook wrote:
| I see more layoffs in Meta's future.
| ReptileMan wrote:
| Before reading the article - interest rates. After reading it -
| yup interest rates.
| Pasorrijer wrote:
| I really hope this drives "My tech delivers value!" instead of
| the asinine "We're going to burn money until we're a monopoly!"
| strategies.
| birdymcbird wrote:
| Latter statement you quoted accurately describes VC and start
| up world.
|
| Big tech was even worse than this. Monopoly? That implies a
| vision and proper focus to achieve business goals.
|
| My take is far less generous. This was one of the biggest
| grifts in recent times. the professional managerial class
| obsessed not with their products or services but instead on
| increasing headcount, building empires, and getting promotions.
| Office politics and political games played by people who
| produced little to no economic value.
| aplummer wrote:
| Honestly 12 months is too short a time period to be looking at
| companies like Apple, which is larger than the whole ASX or
| FTSE100.
|
| It's even with 2 years, it's up 4x on 5 years ago.
| georgebarnett wrote:
| With all industries are converting to software and every person
| on the planet moving towards owning a smartphone it surprises me
| that there's an ongoing narrative that tech is collapsing.
| [deleted]
| newaccount2021 wrote:
| [dead]
| pigsty wrote:
| The fact everything uses software doesn't mean Slack, a generic
| chat platform with dozens of absolutely identical products,
| being acquired for 27.7 billion dollars ever made sense.
|
| That generic software company was valued higher than entire
| industries that supply components that all hardware depends on.
| Tech isn't collapsing. But valuations were and continue to be
| fuckin nuts for a lot of companies and are coming down to more
| reasonable numbers, which look like collapses.
| ehnto wrote:
| Another fun example of looking at valuations versus actual
| real world production and output (real value delivered?):
| Tesla for a period was valued at a higher market cap than
| Toyota, the largest auto manufacturer in the world. Consider
| the real world infrastructure and output of Tesla, and the
| real world infrastructure and output of Toyota. Toyota is an
| order of magnitude larger operation.
|
| So for Telsa's valuation to mate with it's real world
| ambition, it has be aiming to have it's operations as big as
| Toyota's, great! Being as big as Toyota would put it's market
| cap at... oh. Less than it currently is.
| ramesh31 wrote:
| >Tesla for a period was valued at a higher market cap than
| Toyota, the largest auto manufacturer in the world.
|
| Tesla is still valued higher than Toyota, Honda, GM, and
| Ford _combined_.
|
| Something is broken.
| fallingknife wrote:
| That's not true. You are looking at market cap when you
| should be looking at enterprise value. Toyota is $350
| billion and TSLA is $380 billion.
| [deleted]
| cgh wrote:
| Some post-Christmas humour: the other day, Cathie Wood
| said Tesla will go to $7000/share within five years. I am
| not making this up.
| cma wrote:
| They earn more profit than Toyota and have a ton of
| unbooked FSD revenue they can't book but could pay out as
| dividends if they want--apparently they never have to
| deliver in the average lifetime of the cars that came with
| it.
| MonkeyClub wrote:
| Yeah it sort of works like market self regulation, bubbling
| up before it reaches a calm simmer.
|
| But it's still fueled by hype, so unless a strong enough
| crash comes, it'll keep bubbling up.
| georgebarnett wrote:
| Collaboration tools are some way from being systems of record
| and there is substantial difference between competitors.
| Generic chat apps are not yet useful enough (despite years of
| development) for most companies - IRC failing to win is
| evidence of this and so is the fact that companies aren't
| switching en masse to run their infrastructure on whatever is
| the OSS flavour of the day. That doesn't mean it won't happen
| some day, but that day won't be soon.
|
| When coupled with the fact that there are still a huge number
| of companies which haven't yet converted to using these tools
| and purchasing the market leader for a premium makes total
| sense.
|
| With regards to component supply - companies that are
| producing unique chips are worth plenty, where as those that
| are making COTS components aren't.
| JustLurking2022 wrote:
| Is this a ChatGPT experiment? The comment uses a few
| seemingly relevant terms but almost entirely incorrectly.
| "System of Record" had nothing to do with being
| commoditized.
| georgebarnett wrote:
| Perhaps we are speaking about different concepts. I was
| referring to the pace layered architecture.
| nugget wrote:
| Tech seems somewhat unique because you can start a new
| company and within a relatively short period of time (<10
| years) you can threaten the eventual existence of Fortune 500
| incumbents. The entire venture capital/startup ecosystem
| exists to identify these upstarts and help them obtain
| unstoppable momentum as quickly as possible. If the
| incumbents want to survive, they usually have to pay up, and
| the longer they wait, the more expensive it will be. This is
| why Adobe pays $20 billion for Figma. Greed is good, but fear
| is better - for the startup looking to be acquired. There are
| a handful of other Figmas out there (and more will be
| started) and that is part of why tech has so much value.
| scarface74 wrote:
| Everyone says this narrative. But 10 years ago.
|
| - Google was the most popular search engine. Had a dominant
| position in adTech and YouTube was popular
|
| - Apple became the most valuable company in the US and the
| iPhone was sucking up most industry profits.
|
| - Amazon was by far the most dominant electric retailer and
| AWS was taking off (disclaimer: my current employer)
|
| - Microsoft had been the dominant operating system for 15
| years and Office the dominant office suite.
|
| - Even Facebook was the dominant social network.
|
| Not one startup has disrupted the industry in the past
| decade.
|
| AirBnB is probably the only major tech company that has
| created a _profitable_ large business in ten years.
| bckr wrote:
| Yeah, and how many startups did these companies acquire
| in order to maintain dominance?
| svnt wrote:
| Disruption can happen but it is the exception that feeds
| the narrative.
|
| In order for these acquisitions to have high valuations,
| big companies must fear being replaced. It is in VC's
| interest to stoke that fear. They do this by the threat
| of replacement at least as much as through funding for
| actual replacement.
|
| VCs don't have to care whether disruption happens, but
| they do have to care about their IRR, and will say or do
| anything they feel will with high probability increase
| their rates of return.
| scarface74 wrote:
| Most of the acquisitions that happen aren't because of
| fear of "disruption" which is a very overused and
| misunderstood term - especially when defined like Clayton
| Christensen.
|
| They are bought to be an accretive to an existing
| business or the acquiring company thinks they have scale
| advantage to multiply the value of the acquisition.
|
| Another way to put it, that these are "sustaining
| innovations".
| svnt wrote:
| Im not sure how you'd quantify most here.
|
| The highest valuations are not paid for sustaining
| innovations, but for market access risks, which is what
| this thread was about. The two can be the same thing
| functionally, but "sustaining innovations" sounds much
| better in a shareholder meeting.
| scarface74 wrote:
| Let's take Apple. Apple has only made two large
| acquisitions - NeXT and Beats - in the modern area. NeXT
| was bought to "sustain" the MacOS and Beats was bought to
| jump start Apple Music and its audio business. Is there
| any reason to believe that Apple who was already
| streaming purchased movies and musics needed Beats to
| bring streaming technology to the store. Beats was never
| going to disrupt Apple's business. In fact, Cook said
| that Apple acquires a company on average every three
| weeks. Are all those "disruptive"?
|
| Neither LinkedIn or GitHub were going to disrupt
| Microsoft in anyway.
| svnt wrote:
| Jobs, having been forced out of Apple, was leading NeXT
| at the time, and Apple was a failing hardware company.
| Software, driven by Apple's founder was threatening to
| take Apple's market. I don't know how you can say this
| wasn't potentially disruptive.
|
| Post Jobs' death they bought a black celebrity-driven
| entertainment company. This was absolutely a brand threat
| as Apple was now associated with Tim Cook, who is perhaps
| many amazing things but they do not include cool.
|
| Fast forward a decade and Microsoft recognized the game
| that was being played, which is that a set of six murky
| quasi-monopolies attempt to acquire diverse revenue
| streams and not lose information sources or access to
| their markets. While LinkedIn or Github may not have been
| direct threats to any of Microsoft's existing businesses,
| if someone else got ahold of them Microsoft would have
| zero social footprint, which would be a big problem for
| them, having essentially missed out on search as well.
| scarface74 wrote:
| > Software, driven by Apple's founder was threatening to
| take Apple's market
|
| NeXT was already a failure and was transitioning out of
| the hardware business. Apple couldn't make a modern
| operating system to save its life and was getting crushed
| by Microsoft.
|
| > Post Jobs' death they bought a black celebrity-driven
| entertainment company. This was absolutely a brand threat
| as Apple was now associated with Tim Cook, who is perhaps
| many amazing things but they do not include cool.
|
| People aren't buying iPhones because of a producer that
| most outside of Hip Hop only knew because he was the
| producer behind a famous White rapper (Eminem).
|
| > Microsoft's existing businesses, if someone else got
| ahold of them Microsoft would have zero social footprint,
| which would be a big problem for them, having essentially
| missed out on search as well.
|
| Under Satya, they moved away from Windows everywhere to
| cloud and Office everywhere.
|
| Azure isn't popular because of GitHub. It mostly targets
| stodgy old Enterprise customers that are already on the
| MS platform. That's not meant to be an insult. I was a
| stodgy old enterprise MS dev until 2018 when I started
| moving toward AWS technologies (where I now work).
| nugget wrote:
| Google acquired YouTube and Facebook acquired Instagram.
| Both for what seemed like insane valuations at the time.
| Both were brilliant defensive acquisitions in hindsight.
| Both fueled tech valuations by illustrating the
| opportunity for rapid disruption.
| Apocryphon wrote:
| Wonder how it'd go if the DoJ actually practiced
| antitrust towards tech again. The EU Commission does, at
| least.
| scarface74 wrote:
| Seeing that YouTube would have been sued out of
| existence, what difference would it make?
|
| And how would a search engine company buying out a non
| profitable video platform that had no means of making
| money have triggered anti trust action?
| fallingknife wrote:
| Both of those acquisitions were tiny $1 billion buys.
| They only grew into massive entities under their new
| corporate parents. Antitrust doesn't apply to such a
| situation. They could only be seen as critical
| acquisitions in hindsight.
| Kiro wrote:
| Out of all companies you choose Slack, the only one that I
| actually think deserves an insane valuation. So many products
| that are just Slack integrations and that companies fully
| rely on. Have you worked at a big company and seen what
| happens when Slack goes down?
| hef19898 wrote:
| Tech =|= software =|= start-up. Those three things are
| unrelated, and the tendency to equate tech with software let a
| lot of issues on all fronts in the last decade or so.
| georgebarnett wrote:
| I disagree - tech _is_ software and it's so ubiquitous that
| it's essentially invisible.
| Avicebron wrote:
| Planes, trains, and automobiles are tech. Software is a
| specific subset, software is a subset of tolling and
| techniques that's applied to "tech" no more than circuit
| boards, wires, or the wheel. It doesn't have a special
| elevated status. The more people understand that the faster
| people will stop hero worshipping it.
| closeparen wrote:
| It has special elevated status economically because of
| near-zero marginal cost. Circuit boards, wires, and
| vehicles are brutally competitive businesses where you
| try to squeeze $/performance out of Mother Nature like
| blood from a stone. Software is so far from these
| physical frontiers that that incredibly wasteful
| architectures can create enormous amounts of business
| value.
| MonkeyClub wrote:
| Heck, even toilet flushes are cybernetic devices in one
| sense, ie they work by virtue of a self regulating
| feedback loop.
|
| It seems that with software we're hell bent on verifying
| Arthur Clarke's aphorism wrt sufficiently advanced tech
| being indistinguishable from magic.
|
| Think language models, for a contemporary example.
| ChrisMarshallNY wrote:
| _> stop hero worshipping it_
|
| I guess that's the case for software-centric platforms.
| It was _not_ my experience.
|
| I worked for hardware-centric corporations, for most of
| my career, and became used to having software treated as
| a "nice to have, but not essential" part of the product.
| In many cases, my work (and myself) were treated with
| contempt. I got used to being sneered at.
|
| In my experience, this was a disastrous attitude,
| because, despite lots of folks wishing it weren't so,
| hardware, these days, _is_ software.
|
| Software pervades _everything_ , from the compiled
| silicon on peripheral ASICS and FPGAs, to the firmware
| that drives said chips.
|
| In my experience, firmware was treated as hardware, and
| the same rigid, waterfall process was applied to
| firmware, that was done for the hardware.
|
| Worked great.
|
| Until it didn't.
|
| Software is a drastically different beast from hardware.
| I won't bother going into the reasons. Anyone with a
| smattering of knowledge in the area, can list them.
|
| In any case, the hardware folks would treat any attempt
| to leverage the flexibility that software allows as
| "cowboy, low-quality, laziness." It was Waterfall, or you
| were a "bad engineer," and "lazy and undisciplined."
|
| I'm really big on Disciplined software development. That
| does not make me popular with this crowd. It also does
| _not_ mean Waterfall.
|
| In my opinion, there's no way to avoid the difficult
| parts of engineering, but it's also important to be
| adaptive, responsive, and, dare I say it, "agile."
| paulryanrogers wrote:
| Words can evolve. Here on this forum and in large parts
| of culture, 'technology' is any relatively recent
| innovation. Of which software is one of the more
| prominent examples.
| willcipriano wrote:
| Few would debate that the printing press is one of the
| most important pieces of tech humanity ever produced. At
| first it was used to print Bibles, but it was eventually
| used to print all sorts of other things. The
| philosophical texts that were later printed on the
| printing press were not a new "tech", but we pretend new
| apps for a iPhone are for some reason.
|
| When we increase the surface area of a definition like
| you are here it makes words meaningless.
| paulryanrogers wrote:
| FWIW, I'm only stating what seems obvious to me. You can
| disagree though I suspect trying to narrow the definition
| at this point will be pushing a rock up hill or swimming
| up stream.
|
| My view of words like technology is they are more like
| sliding windows, covering what the zeitgeist is
| classifying. Somewhat like the word 'fashion' or 'fad'
| aren't limited to any one specific kind of dress or
| style.
|
| The word 'technology' would be less useful if it always
| had to be qualified to exclude everything from fire and
| the wheel up to the transistor?
| marssaxman wrote:
| > Planes, trains, and automobiles are tech.
|
| Reading and writing are "tech", if you insist on going
| down this pedantic road; but that's not what most people
| mean by that term in this context.
| perardi wrote:
| I'm gonna disagree just a bit here, because it loops back
| around to the possible end of the "tech" hype.
|
| Cars have been tech in this finance and investment
| bubble. Tesla, obviously, but then lots and lots of
| electric vehicle and autonomous driving startups came in
| with the whole song and dance of "disrupting the
| incumbents" and "move fast and break things" and "let's
| milk customers forever and ever with subscriptions for
| self-driving taxis as a service".
|
| Which is in the process of going poof. _(Remember Nikola?
| No. Good.)_. Lots and lots of hype about startups and
| subscriptions, and we've ended up with GM having arguably
| the best autonomous driving tech, and Ford having
| arguably the most hyped recent EV with the F-150.
| plaguepilled wrote:
| As yes, CPUs, those things famously bought because of the
| software that runs it. Certainly not because of any
| fabrication advances by a given company, hohoho. All tech
| is software!
| grog454 wrote:
| > As yes, CPUs, those things famously bought because of
| the software that runs it.
|
| They are bought because of the software that runs _on_
| it.
| plaguepilled wrote:
| You are still licensed the operating system and end user
| software from a separate company or companies. Which
| means the reduction of tech to JUST the software is still
| extremely crass.
|
| Said another way, the dependency graph is bidirectional.
| Software requires hardware to run. Hardware is of no
| practical use without software. The fixed quantity is the
| "use case", NOT the software.
| hef19898 wrote:
| most hardware i use in my life, outside the laptop I use
| to write this comment or my phone, works pretty good
| without complicated software. Heck, even my cars are old
| enough to have some basic embedded software running the
| engine only.
|
| Also, software without hardware to run on, or to write n,
| is even more pointless than hardware alone. At least the
| latter can be touched.
| sharemywin wrote:
| Tech stock prices are based on extreme growth numbers. the
| problem is the denominator, it's so big for most tech companies
| they can't continue to grow at 20-50% a year. so if your P/E
| goes from 30+ to 10 or worse 3-5even if your E is still strong
| but flat alot of wealth disappears. if people feel broke they
| don't spend money on things. the new phone isn't as important
| as say eating. also alot of tech didn't have to compete and
| could still grow wildly. name a non-competitive area of tech
| these days? a blue sky opportunity. that doesn't entail hard
| engineering. autonomous cars, fusion, solar all require massive
| amounts of slog it out engineering.
| candiodari wrote:
| I've often thought this too, but there are several huge
| exceptions to this, whilst outside of tech there are plenty
| of similar examples.
|
| First and foremost, there's the Exceptions:
|
| Google: P/E is more or less 20, decades already
|
| Microsoft: P/E is more or less 20, for a very long time
|
| There are not actually that high. Compare to BABA (P/E is
| >200), IBM (P/E >100), JD (P/E >600)
|
| And the reverse exceptions, non-tech with absurd P/E:
|
| Tesla: P/E is 40 (down from ~500 I might add)
|
| Boston Scientific: P/E is >100
|
| and let's just shut up about crypto, because ... there's is a
| theme. Overwhelmingly the ridiculous valuations are financial
| companies and "semi-"government companies (meaning protected
| by government, but _not_ benefitting the people of the
| country that government governs. Like BABA for example, or
| before their downfall, Theranos). If Tech becomes the P /E
| champion instead of "almost-but-not-quite" corruption
| companies that tend to dominate that, I feel that's a very
| good thing indeed.
| crazygringo wrote:
| Obviously tech itself isn't collapsing -- it's the astronomical
| _growth_ that 's collapsing, and much of valuation is based on
| growth. Now it's turning into merely "normal" growth. But
| that's all investor-side.
|
| Consumer-side, it's really more about tech _maturing_. If we
| take your example of owning a smartphone, it means that most
| people _already_ have smartphones, and since the yearly
| upgrades are much more incremental now, people don 't need to
| upgrade as often.
| kalimanzaro wrote:
| If by tech we mean everything touched by Moore's law, all
| this degrowth seems also to be a consequence of the
| lengthening of the doubling time in flops and words.
| Ultimately what you mean by normal growth would then be the
| replacement rate of your old computer by a new but not more
| powerful computer.
| [deleted]
| BeFlatXIII wrote:
| Market saturation, my friend.
| balsam wrote:
| Nope.
|
| From TFA: "But just as chip production bloomed, demand
| withered, thanks to falling sales of pcs and smartphones."
|
| The narrative is apparently backed by data. Where's the data
| for your counternarrative
| ngoilapites wrote:
| Only economically non-sensical ventures will collapse. Tech
| will be always strong, but not always overvalued or able to
| open market with limitless VC capital.
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