[ellen364]

> Software is an extremely scalable business where the marginal cost of every copy beyond the first is nearly zero.

and

> If you can drive the cost of doing business and your inputs toward zero almost any business idea could theoretically make a profit... but real markets are not so accommodating.

I agree with many of your points, but these vary by product. For example, FAANGs sometimes have applications where some inputs don’t scale well, e.g. the local knowledge that goes into mapping apps. But the company often provides the service for free and benefits from volunteers (free labour) adding valuable information like “this road is closed”. That product feeds into the ads part of the business, which does scale really well.

I’ve also noticed that FAANGs sometimes outsource work that doesn’t scale as easily. The contracting companies are either in cheaper countries or they’ll accept a smaller profit margin. Or both. The devs and analysts at those companies indirectly contribute to the FAANG’s product, but don’t get the bumper salaries.

Put another way, I think big tech companies do often try to “drive their inputs toward zero” (to paraphrase a little) but US-based devs don’t often experience it.

[908B64B197]

> I’ve also noticed that FAANGs sometimes outsource work that doesn’t scale as easily. The contracting companies are either in cheaper countries or they’ll accept a smaller profit margin. Or both. The devs and analysts at those companies indirectly contribute to the FAANG’s product, but don’t get the bumper salaries.

It's also lower complexity tasks.

Cleaning-up training data or monitoring a manual test pipeline isn't really work that would make sense to be done by a team of 400K/y US-based team.

[ellen364]

I suspect that’s often true, but the outsourced work isn’t always as routine as cleaning up training data. E.g. I worked at a company that provides “real-time transit data feeds for journey planners”, to quote the marketing literature. The company’s publicly mentioned customers include Google and Microsoft.

I’d guess (and it is a guess) that big companies like to outsource that kind of work so their devs only have to deal with the tidier data? And perhaps also because dev salaries in the UK are so much lower.

[908B64B197]

> I worked at a company that provides “real-time transit data feeds for journey planners”, to quote the marketing literature. The company’s publicly mentioned customers include Google and Microsoft.

So they aren't outsourcing dev work, they are basically buying access to the data feed.

> And perhaps also because dev salaries in the UK are so much lower.

Not for SV caliber talent.

[ellen364]

That’s interesting to hear. If someone who’s just graduated from a top UK compsci course asks me for advice, where should I recommend they apply to get a starting salary >£100k?

[DeathArrow]

>I’ve also noticed that FAANGs sometimes outsource work that doesn’t scale as easily. The contracting companies are either in cheaper countries or they’ll accept a smaller profit margin. Or both.

Or they open subsidiaries in other countries. Google are developing Fit Bit in Romania and they are paying 10x smaller wages.