[wpietri]

I'm sure this is true by the standard MBA tooling. But if everybody is using those tools, it leaves opportunities for people thinking differently. Amazon, for example, has been hoisting a giant middle finger to MBA dogma for years with their overinvestment, and Bezos seems to be doing fine by it.

Another way to think about it is that Google really should be doing long-term research, because only finding and monetizing a major breakthrough is going to make it so that they don't have all their eggs in one basket. A basket that will, like all baskets, eventually break.

A third way is that as long as Google is extracting monopoly rents, they should probably put some of that money into government-like things that could have broad societal benefit. Because if they keep trying to maximize quarterly profit, they'll burn up all the societal goodwill that insulates them from real regulation.

[thu2111]

Google are doing a lot of long term research though. Huge investments in AI, search tech, big data, networking, the TPU stuff. Self driving cars. Contact lens screens. Head-mounted displays. Drones. The list goes on and on.

Makani was funded for 14 years! 14 years!! How many companies are willing to fund speculative research programmes in things unrelated to their core business for so many years? None, that I'm aware of.

Truth is Makani should have been shut down years ago. Government or corporate has nothing to do with it (that is, the same assessment would apply if it was funded by the government too). Their idea clearly wasn't competitive with the by now highly optimised wind turbine industry. It's not obvious why it ever was expected to be so.

[wpietri]

You seem to be arguing with something I didn't say.

I definitely agree that Google should prune their portfolio using rigorous standards. I'm just saying that if one judges the whole effort by typical established-business standards, you're going to get typical results. Some things need more time to prove viability. Since Google a) will be around a long time, and b) is currently dependent on a single cash cow, they can (and should!) take long-term risks with long-term payoffs.

> It's not obvious why it ever was expected to be so.

This is a very bad way to look at long-term research. Or any novel venture, really. You want to be a pundit with a great track record on startups? Just say each one will fail. You'll be right 90% of the time with very little effort.

But it's even easier to wait until something fails and say, "It's not obvious why it was ever expected to work." Of course! If it were obvious that something was going to work, it wouldn't need to be done as a startup. And once it has actually failed, hindsight bias lets us paint it as an inevitable failure. E.g., if SpaceX had had less money and a couple more explosions, it could easily have gone under, and then all of its detractors could have done the "we told you it would never work" routine.

[WoahNoun]

>Amazon, for example, has been hoisting a giant middle finger to MBA dogma for years with their overinvestment

This is not a great way to think of Amazon. Amazon is basically a VC that only funds internal "start-ups" and "unicorns." You still go to Bezos and the leadership team with a business plan, financial model, path to profitability, market fit, differentiation, competitors, TAM/TAM growth, and "is it a land grab?"

They do not fund "interesting ideas for the sake of interesting ideas" like the Google X projects. Even the most secretive Amazon projects tend to tie pretty closely to their existing businesses and strategies when they are revealed.

Also, not sure if this is still true, but Amazon was the #1 largest hirer of MBAs from top programs for a couple years.

[wpietri]

As I explained elsewhere, Alphabet's moonshot investments are a different kind of investment than the what Amazon has been making for decades. But Amazon has been investing very heavily in changing the nature of buying stuff. To much grumbling from people who preferred profit.

15 years ago Bezos could have retired rich and turned it over to a standard CEO, who would have milked their then-excellent position commanding a large and growing share of ecommerce. And he would have been applauded by a lot of analysts, etc. But instead he's put titanic sums of money into making what are, at least on paper, pretty modest gains in terms of purchasing friction and latency. Is 2 days really that much better than 3-7 days? Is next-day and same-day really better still? The customers' answer is "fuck yes!" But it wasn't clear up front, at least to a lot of investors and commentators, that it was really worth tens of billions in capex.

In both cases, what I'm talking about here is investments that go beyond the time horizon of most companies. If you measure them by the average company (which has a much shorter exec and CEO tenure), of course they'll look bad.

[throwGuardian]

Amazon is not a good example to cite for going against the MBA grain. No amount of convincing can get Amazon to fund a Makani style kite energy, or other X moonshots that Google funded.

As for ploughing investment to keep growing at the cost of profitability, that's every VCs formula and very well understood by the MBA crowd.

[wpietri]

It's the worst example for this kind of investment, sure. But the common theme is that what your average exec sees as needless investment may just have a payoff outside the few-quarters-to-few-years range that they are using to score investments.

I'll note that the US had much higher economic growth during a period where large companies all were, by modern standards, overinvesting in R&D. It could be that we're just much smarter now. But it also could be that since CEO tenure has fallen nearly in half in the last 50 years, execs have stopped investing in things that they won't personally be around to profit from.