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PaperclipPerfector  5d ago (text post)   2516 thread views

Friday Fun Thread for January 10, 2025

Be advised: this thread is not for serious in-depth discussion of weighty topics (we have a link for that), this thread is not for anything Culture War related. This thread is for Fun. You got jokes? Share 'em. You got silly questions? Ask 'em.

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Aside from server reliability, what other things do they need all these bigbrains for?

I think asking the question with the word "need" is likely to lead to confusion. Instead, note that as long as the marginal benefit of adding one more developer is larger than the amount it costs to do so, they will keep on hiring, and so the key is to look at what those marginal developers are doing.

Large organizations have non-obvious advantages of scale. This can combine with the advantages of scale that companies have to produce surprising results.

Let's say you have a company with a billion users and a revenue model with net revenue of $0.25 / user / year, and only 50 employees (like a spherical-cow version of WhatsApp in 2015). Let's further say that it costs $250,000 / year to hire someone.

The questions that you will be asking include

  • Can I increase the number of users on the platform?
  • Can I increase the net revenue per user?
  • Can I do creative stuff with cashflow?
  • And, for all of these, you might consider hiring a person to do the thing.

At a billion $0.25 / year users, and let's say $250k / year to hire a person, that person would only have to do one of

  • Increase the size of the userbase by 0.1%
  • Increase retention by an amount with the same effect (e.g. if users typically use the platform for 3 years before dropping off, increase that to 3 years and 1 day)
  • Or ever-so-slightly decrease CAC
  • Increase expected annual net revenue per user by $0.00025
  • If the amount you make is flat across all users, double annual net revenue per user specifically for the specific subgroup "users in Los Angeles County", while not doing anything anywhere else
  • If the amount you make per user is pareto distributed at 80/20, figure out if there's anything you can build specifically for the hundred highest-revenue users that will cause them to spend 10% more money / generate 10% more revenue for the company (if the distribution is more skewed than 80/20, you may end up with an entire team dedicated to each of your few highest-revenue customers - I would not be surprised if google had a team dedicated specifically to ensuring that Mr Beast stays happy and profitable on YT).
  • Figure out how to get the revenue at the beginning of the week instead of the end of the week
  • Increase the effectiveness of your existing employees by some tiny amount

Realistically you will instead try to do 100+x each of these with teams of 100+ people, and keep hiring as long as those teams keep wanting more people. But those are the sorts of places to look.

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