[fnordpiglet]

In my 32 years in the industry the best performing companies always did these things regardless of the macroeconomic climate. It’s when you ceded leadership to the accountants and shifted gears to maintenance mode that companies stopped growing. You never did these things for fun, you did these things because they had some knock on effect that made it potentially worth it, and in a portfolio of many small bets some would blow up into your next big product. Even the ones that seem far left field they created an environment where people felt allowed to dream at all, and their knock on effect was in creation of a risk taking culture.

Blaming low interest rates on taking risk and doing highly speculative things, and investing in a culture that values that by funding off the wall stuff puts too much emphasis on the capital markets. If the company was a steel producer, fine. If it’s a company that essentially captures the stuff of dreams and produces a service that executes thought stuff in machines, you have to decouple your R&D from capital management to the extent your free cash flow can accept it.

Note of course low interest rates and other capital market looseness will create more opportunity for this behavior, and not every company doing these things is doing some is a well managed way. But they don’t have to - that’s the magic of capitalism. Through a Darwinian process only those who strike magic win and survive and the others recycle and try again. This feels like a feature not a flaw of zero interest rates - it creates enormous value by virtue of incentivizing taking risk at a time of high innovation. There are times in history where innovation rates were very low, and zero interest rates would just incentivize broken behavior. But at a time when almost all growth is coming from innovation, maybe loose credit is smart. ml

[ctvo]

> In my 32 years in the industry the best performing companies always did these things regardless of the macroeconomic climate.

Agreed. Creative, high performing people don't do well in a work environment that's structured like a regional bank.

Valve Software -- incredibly profitable, high performing and private company, did fun things like hire economists (and then later Greek prime minister) to study and simulate virtual, in-game economies [0].

Blizzard Entertainment had giant statues of orcs made and fan conventions before their downfall, ya know, in the ZIRP macro economic environment.

Google allowed their engineers 20% time. Before ZIRP.

0 - https://en.wikipedia.org/wiki/Yanis_Varoufakis#Academic_care...

[drzaiusapelord]

Just a small correction, Yanis was the minister of finance, under the PM, who at the time was Alexis Tsipras.

[hyggetrold]

> Google allowed their engineers 20% time.

I once heard that this was more like 120% time? Meaning, 'extracurricular activities' on company infra was allowed and encouraged, but not at the expense of regular productivity/output.

[balls187]

> Valve Software ... high performing

Depends on how you measure performance. ARPU? Very high. Shipping software? Super low.

[wintogreen74]

what about the hardware that significantly leverages their non-game software? I think the full ramifications of what they're doing with mobile gaming have not yet been felt.

[tshaddox]

> In my 32 years in the industry the best performing companies always did these things regardless of the macroeconomic climate.

I think the question is more about whether doing these things caused the company financial success, or whether the company's financial success caused them to do these things. It strikes me as plausible that it's almost always the latter, even if the company's financial success isn't attributable solely to the macroeconomic climate.

[fnordpiglet]

Usually the issue is you can’t encourage creative risk taking with structured austerity. Structured austerity is about improving operational efficiency and there’s a place for that. But at companies that survive and thrive on creative risk taking, giving the reigns to the CPAs kills the culture.

I think it’s usually a sign of success that to protect the golden goose you stop taking creative risks and focus on operational efficiency.

Macroeconomic conditions really matter a lot more for capital intensive enterprises like manufacturing, refining, real estate, etc. Most creative / R&D based companies are much less cost of capital sensitive and frankly low interest rates matter a heck of a lot less for their planning and operations.

[whiplash451]

I see a third causality option.

Both « being successful » and « doing these things » could be caused by a single root cause: a leadership team playing the long game.

[Aurornis]

> In my 32 years in the industry the best performing companies always did these things regardless of the macroeconomic climate.

My anecdote, FWIW, is that some of the worst performing startups do these tricks too.

There's something about flashy events and boondoggles that sound good on LinkedIn that draws bad founders into spending waaay too much on parties and fun activities.

Stripe obviously isn't in that category, but never assume that because a company spends a lot on parties and events that they're doing well.

[JeremyNT]

> My anecdote, FWIW, is that some of the worst performing startups do these tricks too.

I absolutely agree with this. Monkey see, monkey do.

I think the big winners who make it "fun" are the exceptions that prove the rule. Whatever they really have that leads to success (be it simply luck, timing, connections, market fit, whathaveyou) is a lot less visible and harder to replicate than the lazy, obvious stuff like "make the workplace fun for developers" which any wannabe can emulate.

[Solvency]

Seriously. Half of the Silicon Valley show was lampooning this corporate excess of frivolous indulgence.

[sokoloff]

My wife is not in tech (and so enjoyed Silicon Valley quite a bit less than I did when we watched it together).

Every so often, she'd express frustration about the "over the top writing" in Silicon Valley. Way over half the time, I could tie whatever it was she was complaining about to some concrete story from our industry.

[hyggetrold]

I read a great article about the making of the show and there were many real-life stories they couldn't include because they felt people wouldn't believe it was real.

I think their go-to example was meeting up with a Google X person in their offices and that person getting huffy about something or other and then trying to storm out. But then they had trouble with their keycard so there was that awkward pause because they couldn't just storm out and slam the door. Best part was that they were on inline skates (and rocking a pony tail!) so it was a totally Mike Judge perfect moment - weird silent tension as pony tail skate master is trying to beep himself out of the room.

I've definitely seen and heard about lots of strange things in SV that people simply wouldn't believe if they heard it.

[mlrtime]

Exact same situation here...

My wife thought the show couldn't be reality. I told her I'm confident that almost everything you see in this show happened in SV to at least someone, just not the same company/people in a short amount of time.

It's like if you took every story in SV history and compressed it to one company in 6 years.

[zilti]

I know wannabe-execs who unironically think the "tres commas" guy is cool

[jaredklewis]

> In my 32 years in the industry the best performing companies always did these things regardless of the macroeconomic climate.

What companies?

Some of the best performing public tech companies of the past 30 years include Amazon, Apple, Netflix, Nvidia, and Microsoft.You can get some variety in this list by varying the exact start and end dates, but certainly the first 4 are going to make most lists. Others like Google and Facebook handily beat the total market.

Certainly a lot of companies that never went public (Instagram, WhatsApp, Credit Karma, etc...) performed very well for their investors when they got acquired. And some companies that since going public haven't been blockbuster successes, like Snowflake, still were probably very lucrative for their VCs and other early investors.

Anyway, I don't feel like most of the really great performing companies that come to my mind are particularly "fun," but maybe I maybe I'm not paying attention and/or don't know because I don't work at them.

[drzaiusapelord]

Great comment. ZIRP is endless stock buybacks and $boomer_rock_band or $expensive_celebrity speaking at your conference. Those are capital owner and executive benefits and don't drive the product or curate new customers.

Tony Hawk at this event is just a marketing stunt and his celebrity can be beneficial to drive engagement, impress potential customers, keep existing customers happy, help with recruiting, etc. Those stunts can get incredible attention. Look at how common celebrities in advertising and endorsements are.

Stock buybacks, having the Moody Blues play your annual meeting or the Rich-dad-poor-dad guy give a speech to execs and play down to their biases doesn't drive marketing or the product. Its what execs enjoy personally and burn through money for these entitlements. Instead this money should be used to give raises to the working class.

Also I'd substitute accountants for MBA's in your comment.

[sokoloff]

Share buybacks are a capital return to investors. This is a sensible and desirable thing to do in a lot of macro environments. ZIRP may increase the instances of borrowing money to do share buybacks, just like it would increase the propensity to borrow money to do any other valid corporate activity. There were share buybacks in the 80s and 90s when interest rates were quite a bit higher than today.

Adjusted for inflation, there were more buybacks in 2000 than in 2015 and interest rates were quite a bit higher in 2000 than in 2015.