[mrweasel]

> Not everything needs to be a damn unicorn.

More people needs to understand this. It's fine being a small(ish) business that turns a profit and provides a service that's beneficial to society. You don't need to be a billion dollar company to be important or do great work.

DHH talked about this 15 years ago. https://www.youtube.com/watch?v=0CDXJ6bMkMY

[mrtksn]

But the whole "Tech" economy is based on the premise that everything must grow indefinitely and indefinitely means that at some point will be a unicorn.

Europe is considered economical failure because there are not enough unicorns, there are lists on Twitter with list of unicorns per country that are supposed to show the decline of Europe. No matter if Europe has some of the best living condition for large group of people.

IMHO this thing is ideological, I even feel uneasy mentioning this because it is something we are not supposed to talk since it can start a flamewar and flamewars are how you get your account restricted.

[janalsncm]

Between 2009 and today, the US doubled GDP while life expectancies fell. In the EU, GDP is stagnant but life expectancy went up.

Those who say Europe’s economy is a failure should at least consider what the purpose of an economy should even be.

[orwin]

Consider a city, paying two gardeners 25k each per year, and an extra 5k for two month. Spending is 55k+oil+chemicals+tool maintenance (that the gardeners usually do). Let's say the annualized cost is 75k. So this service contributions to GDP is 75k.

Now, the city wants to show GDP/capita growth. Simple : let's pay a company X that will pay the gardeners. It'll cost 95k. Now the GDP is 95k+ 55k (let's say the gardeners are on the same pay and have the same work). But wait, maintenance can be done by the company Y! Now the GDP is 95k+55k+20k (maintenance fixed cost 10k+worker time 7k+ 3k profit). But wait, now during winter, our gardeners have nothing to do! That eat into our profits!

Now the GDP is 95k + 50k (what is paid to the temp company)+20k+45k, and gardeners are both paid 20k/year gor this job, and can do other stuff during winter (I hear a repair shop need temp workers during inter to fix gardener tools).

The GDP grew from 75k to 160k, a bit more than 100% growth, and we optimized the economy as now gardeners can keep specializing and do gardener stuff during winter instead of learning about motors and mechanics. Great!

[Rexxar]

It doesn't work like that at all. You add GVA (https://en.wikipedia.org/wiki/Gross_value_added) of each entities. Adding more intermediate entities doesn't increase GDP as the GVA of each entities is reduced.

[rightbyte]

Is each transaction added to GDP? In that case it is a really BS number.

[jahnu]

https://www.smbc-comics.com/comic/2013-01-14

[refurb]

Where does the extra money come from? Out of thin air?

[raincole]

GDP isn't money. It's production.

There is an assumption behind GDP: people generally pay production for a fair amount of money. The more untrue this assumption is, the less meaningful GDP is.

[mrguyorama]

It's not even production because of that assumption. It's "sum of prices paid" basically

[refurb]

I’m talking in the example ” let's pay a company X that will pay the gardeners. It'll cost 95k.”

Where does that 95k come from?

[ta988]

This is exactly what GDP means... take everything multiply by price and sum.

[dustedcodes]

wow that is super interesting (although not very surprising). Do you have any sources for this?

[mrtksn]

Europe: https://www.macrotrends.net/countries/eur/europe/life-expect...

USA: https://www.macrotrends.net/countries/USA/united-states/life...

I'm sure there are nuances but according to this particular source European life expectancy went from 75 to 79, US life expectancy went from 78 to 79 with a period of a decline between 2013 and 2018.

[glimshe]

The decline in US life expectancy is more complex than a general reduction in quality of life, and mostly unrelated to the US financial culture to leads to unicorns. The American ideal of huge companies that must take over the entire market can be traced at least all the way back to the railway robber barons, and has existed even during periods of immense growth in life expectancy.

At the same time, a lot of the increase in life expectancy in the EU is due to improvements in medicine that are significantly driven by US-funded research.

[mrtksn]

Why do you think that actions of these huge institutions are not impactful to the life quality of the Americans?

Also, why do you think that the European live longer thanks to the medicine developed in the USA? Maybe the USA develops medicine thanks to the free and equal opportunity education culture in the Europe? If you look closely to the researchers, you will see that lot's of the people who develop these things have European roots and by roots I don't mean their grandpa was Irish, I mean they were educated in Europe and it just happens that the organisation that develops these drugs is incorporated in the USA.

The tech revolution that changed the world was also developed in Europe, the web was developed by the British in EU institution, Linux was made by a Finnish guy called Linus, Nginx is Russian-made.

Also, we are at a verge of AI revolution and some of the leading researchers are Europe educated people. Just check the bio of the top researchers who were instrumental at Tesla or OpenAI.

Maybe the USA is just the industrial zone of Europe? Maybe the US appears rich and acts poor simply because because the richness comes from the accounting choices? Just kidding of course, the USA is a superpower and is actually rich thanks to many things like its abundant resources and brilliant people but the notion that the Europe is doing better because they just drink smoothies and meditate all day on the American resources and innovation is ridiculous.

[benterix]

> At the same time, a lot of the increase in life expectancy in the EU is due to improvements in medicine that are significantly driven by US-funded research.

Frankly, I don't believe it's true, for two reasons. First, the European Big Pharma is quite strong. It would be more fair - but not precise - to say the rest of the world benefits from the advances made in the West.

As for the second point, it was succinctly put by Dr. Marcia Angell from The New England Journal of Medicine in her famous book. From the blurb: "Drug companies, she shows, routinely rely on publicly funded institutions for their basic research; they rig clinical trials to make their products look better than they are; and they use their legions of lawyers to stretch out government-granted exclusive marketing rights for years. They also flood the market with copycat drugs that cost a lot more than the drugs they mimic but are no more effective."

[janalsncm]

If the US is funding the research, what is it about the US political system which prevents Americans from enjoying those same gains?

I suggest that perhaps it’s a difference in perspective on rights. In Europe, there is a positive right to healthcare. In the US, there is no such right apart from certain circumstances. We turn our nose up at “handouts”. The US expects the free market to handle it instead, which it has. This has led to large portions of the country with few doctors and even fewer affordable ones.

[ta988]

Research mostly done by underpaid researchers from China, India and Europe coming to the US in the hope to get a better life. The whole system is complex.

[lifeisstillgood]

This has come up before (searching for ref) but the basic explanation is GDP when adjusted for PPP in eurozone is more or less same as USA over that period (ie both economies grew at much same rate).

Basically things in America got more expensive (gas, health, education being big contributors). There is lots of wriggle room in the numbers but the vast gulf by nominal GDP is surprising and so unlikely .

[imglorp]

What's the biggest impact on life expectancy in the first world that shows up at this level? Healthcare, walking culture, food options, other?

[mrtksn]

It's probably a very complex thing and both sides of the discussion can pick something to attribute for. For example, you can say that it's because of the opioid crisis in the USA and pretend that it's happening in isolation - just some bad actors doing bad things that don't have anything to do with anything else.

[charlieyu1]

Hong Kong has one of the highest life expectancy of the world and a major contributing factor is high population density. Paramedics are able (and must) arrive within 12 minutes of an emergency call, which is probably the most important time to keep people alive. Doesn't mean Hong Kong is a decent place to live though.

[kcb]

Young people dying of drug overdose.

[read_if_gay_]

surely there are no confounders here

[jncfhnb]

Well… it’s not maximizing the length of life?

I would not cite this as a success story. Europe does not seem to be heading in a good direction imo. The consequences are largely unrealized. Even pretending the war never happened and they continued slurping Russian gas.

[camillomiller]

Please be informed before commenting. Europe has undergone the hardest and most painful decoupling from Russian gas for quite a while. As of 2022 no gas in Europe is imported from Russia.

[Tarsul]

I'm with you in argument. Nonetheless, Europe still imports 9% of its gas from Russia: https://www.spiegel.de/wirtschaft/erdgas-versorgung-europas-...

[theironhammer]

It's essentially killed the German economy. It's all by design. The Americans don't want Germany and Russia teaming up to be a Regional Hegemon of Eurasia.

Also now America can supply Germany with Gas.

Is all by design. American Hegemony.

[camillomiller]

It has not. Germany is in technical recession, but people are not dying in the streets, have jobs, and can take care of their families. In the US the economy is stellar, yet homelessness is peaking, with people unable to afford housing even if they have a job. Stop calling it “the economy” as if it was a direct translation of the reality of a society. It’s not. Signed: a business journalist.

[jncfhnb]

Yes, that is my point. That hurts a lot and is enough to derail Europe pretty severely.

But even had that not happened Europe wasn’t trending very well.

[deterministic]

“Europe is considered economical failure”

Hahahaha that’s funny. Europe has one of the richest and strongest economies in the world. Thousands of European companies are world leading in high tech areas, exporting high tech to U.S. and other companies around the world.

The worlds most advanced microchips can’t be built without machines made in Europe. European Airbus came from nowhere overtaking Boeing in a short number of years. The European invented ARM is now the leading CPU instruction set used worldwide etc. etc. etc. There are many more examples.

And focusing just on software: C++, C#, Linux etc. were invented by Europeans.

You might as well argue that the US economy is a failure because European and Japanese companies overtook US car manufacturers or that the US is a failure because Americans needs to take illegal drugs to handle the misery of living in the US. All equally silly arguments.

[uoaei]

The digital economy is agricultural revolution 2.0 (probably more like 20.0).

Claim a small corner of (digital) land so you can grow some revenue. Now you can produce content. But now you need to sustain your content production infrastructure for the benefits of revenue. We've now justified our initial claim. Then claim more land, tilling over organic content for an optimized, manufactured experience! Now that you have more land, you can grow more revenue! Now that you have revenue, expand your business! Oops, now your business needs more revenue or else it will starve. Claim more land! Rinse and repeat.

[camillomiller]

Thanks for saying this. This is absolutely the case. We forget venture capitalism is absolutely first and foremost a framework built on an ideological system. Founders NEED to be convinced they’ll change the world with their juice press or the game won’t work. The growth myth is part of this as well.

[palata]

> You don't need to be a billion dollar company to be important or do great work.

And importantly: because you are a billion dollar company doesn't mean you bring good to the world. At all.

[lvncelot]

I'd even argue that the burden of proof is reversed. There might be billion dollar companies which bring good, but I'll be skeptical of that fact at first.

[Ekaros]

I would argue that there is plenty of large(above billion dollars) companies that bring net good to world. Manufacturing is good field. Producing things like machinery improves quality of live and productivity.

Not that these often doesn't have negative aspects when they strive for even higher value extraction, looking at something like John Deere. Still it does allow massive efficiency gains in farming.

[BoxOfRain]

I wonder if there's a general rule that the larger an organisation the more pronounced the diffusion of responsibility and the higher the likelihood of shady behaviour? It would be interesting to see some studies into this either way.

[rpastuszak]

I would imagine this gets progressively harder the bigger you get.

[layer8]

Thus why one should rather prefer slow growth. Fast growth only means you’ll be more likely to reach the shitty state faster.

[palata]

But slow growth brings less money to top management, and top management decides if they want to go for slow or fast growth, right?

[agentgumshoe]

I think the simplest way to measure that is by asking 'what would we truly lose if this company disappeared tomorrow?'. With one follow-up question of 'how easily could the important bits actually be replaced?'

[danaris]

No; that kind of thought experiment heavily biases in favor of large organizations.

It's much more helpful to ask, "What would we lose if this company were broken up tomorrow into parts no larger than (say) the median company size?"

[agentgumshoe]

I think it does the opposite, it makes you think about whether the company is big because of its products/services or other reasons. It's not a yes/no answer, it's a prompt.

[palata]

> 'what would we truly lose if this company disappeared tomorrow?'

I guess such a big company is here because they managed to create a need. The question may be: "were we really worse off before we had what this company built?".

Example: if GitHub disappears tomorrow, that's likely a pretty big problem. But we were fine before GitHub, we just had different (not worse) workflows. GitHub created a dependency.

[mschuster91]

The problem is ambitious management on all levels. When you're running a billion dollar business, you can extract far better compensation (base, bonus, stock options) than if you're running a hundred million dollar business.

The obvious solution is a compensation cap, not just because CEO comp has exploded while lower rung compensation has virtually stagnated, but also because it might put an end to the constant drive of companies to just gobble up competitors.

[1] https://www.epi.org/publication/ceo-pay-in-2020/

[scarface_74]

Once you take VC money, you don’t really have a choice but to grow large. That’s their entire business model.

I can’t find it now. But Spolsky himself wrote about how Fogs Creek Software could be what we now call a “lifestyle company” that could grow slowly. But he felt he needed outside investment so Stack Exchange could grow fast since it was only useful if it had network effects.

[pydry]

"People" understand this just fine the problem is that the economy is structurally geared towards creating unicorn monstrosities that extract value rather than SMEs that create value.

If there were legal and regulatory pressure that crushed and broke down these behemoths (e.g. a FTC and judges that believed that predatory pricing was real and prosecuted accordingly) the VC model would break and this stuff would stop happening.

[dmvdoug]

I’ll preach it again: people need to learn that satisficing is a good and valuable end-state!

[aleph_minus_one]

It is a startup wisdom that stagnation (i.e. no growth) means death.

The often stated reason why C-level executives are paid so well is that they have to be able to solve the insanely hard problem of finding new growth opportunities for the company over a long(er) period of time; something few people are capable of.

Well: by this criterion, many CxOs fail to deserve this huge pay (more precisely: they build Potemkin villages to pretend growth where in reality they burn the company's substance).

[dmvdoug]

They should bring me to Startup Bootcamp or whatever it is, so I can preach the satisficing gospel.

[bunga-bunga]

> > Not everything needs to be a damn unicorn.

> More people needs to understand this.

I sounds more like neither one of you has had that choice. Most people, given the chance, would rather add a zero to their savings rather than “doing the right thing for society”

[geysersam]

Then we should not depend on people making the right choice. We should limit the opportunities people have to choose between "more for me" and "do something useful for society".

One idea here is more progressive taxation.

[chasd00]

> We should limit the opportunities people have

Riiight. See you at the voting booth.

[geysersam]

Opposite. We should empower people by having a system where you don't become homeless because of random medical expenses.

[gottorf]

> Then we should not depend on people making the right choice.

Broadly speaking, any system that depends on an unbroken chain of good people who do the right things out of the goodness of their hearts is bound to fail much sooner rather than later. So I agree.

The system should be designed so that people taking action out of their own interests nevertheless advances society as a whole. As Adam Smith put it: "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest." The system that was designed this way is capitalism, warts and all.

> One idea here is more progressive taxation.

I'm not sure how that conclusion follows from your premise. If you want to set up incentive structures such that people chasing their own interests also ends up being useful for society, then you want to make sure that people voluntarily pay money for goods and services that they value. The supplier of that value makes money, the consumer of that value is better off, and society as a whole is enriched as a result.

This also means that the state takes action to break trusts and monopolies, and (more difficultly) guards against regulatory capture, all of which end up making it so that people involuntarily pay for goods and services that they don't necessarily value. Rent-seeking behavior such as this is one of the highest economic ills.

"More progressive taxation" does many things, but it is also exceptionally good at enriching the politically well-connected, often in the form of rent-seeking behavior I described above. Look at world government spending as a fraction of GDP[0] as a good proxy for "more progressive taxation", and tell me between France (58.5%), the US (38.5%) and Singapore (15.4%), which you consider a well-run country where people do more useful things for society.

[0]: https://en.wikipedia.org/wiki/List_of_countries_by_governmen...

[noelherrick]

I don't think that's true, and I think you're revealing something about yourself vs. the majority of people (besides the fact that most folks, especially in the US, don't have enough money for an extra 0 to mean much). I think of the teachers, social workers, public defenders, volunteers, and civil servants who sacrifice greater earning potential because they believe in what they're doing.

It's like folks who claim people are motivated only by money: no, you're only motivated by money. Most folks see money as a means to an end, namely, a safe, normal life lived with loved ones.

[refurb]

You shouldn’t take VC money if you’re not going to try and be a unicorn.

VC’s aren’t interested in your “smallish business that turns a profit” and neither are the LPs that invest in the fund.

[sgarland]

God, I wish more companies realized this. Doing one thing, and doing it well, is admirable.

[mrguyorama]

But how can I build a company to send rich people to space for dick measuring contests with only $1m a year in salary?!

[wnc3141]

On the contrary, it's difficult to sustain the lifestyle of a unicorn founder unless you have a unicorn valuation. In less sarcastic terms, the ecosystem (VCs, founders etc) often is drawn to or selected for those who whish to get rich and get out.

A hundred and fifty years ago people risked incredible suffering in order to strike gold. All when slow and steady profit could be made by owning a farm.

[dreen]

You can't talk people into not being greedy. Definietely not while living in an economic system that is built on it.

[pmontra]

But each CEO of those businesses would like to be the next billionaire. Furthermore if the business doesn't turn out to be as good as they hope they can leave and try to get lucky at another company. They care about the company only up to a (small?) point.

[SkyPuncher]

More people do understand this, but aren't in a situation to follow it.

Many tech companies are only plausible with VC funding. In order to get VC funding, you generally have to have a path towards being a unicorn.

[ahartman00]

> Despite growing revenue, it lost $84 million over the year ending on March 31, 2023

Its not possible to run a business that loses $84 million. You will run out of money.

[cornholio]

> It's fine being a small(ish) business that turns a profit and provides a service that's beneficial to society.

It's fine, but it's no unicorn. And having such a business might be the closest and only chance the people involved have at real wealth and impact - they are 90% there, and only need a little scale, or so they think.

If you were in their shoes, you would do the same.