[opsnooperfax]

I think this is a systemic problem of an industry where gross margin is 80% or higher, so you can plow all that extra money into superfluous headcount tasked with objectives of questionable business value. It’s a curse of riches, if you will. The rest of us living on 15 to 30% margins need to think a little harder about what we do and why.

[giancarlostoro]

It's worse when you consider these are the only companies that can afford it due to the tax implications of R&D, my understanding was that you still pay the full bill on a developer building something as if you were making profits, even though you're burning their entire salary and other resources on it.

[HFguy]

FWIW, what you will see at times in the HF world is a firm will want to get into a strategy and build competing teams. It lights a fire under both. It diversifies the risk. You can select winner and move some people over from loser. And if they both work, they both work.

It isn't a crazy idea if the opportunity is large enough to make the larger investment required worth it.

The problem I see in applying this to products is it can be very confusing for clients.

[ur-whale]

> I think this is a systemic problem of an industry where gross margin is 80%

explain how GOOG's margin is 80%

what methodology do you use to derive that number?

just curious.

[Eisenstein]

Its 36% for Q1 2026.

* https://i.imgur.com/3gDVMCk.png

[superjan]

The way I understood the 80% is that is the margin on the actual product. 36% is what remains after the “investments” in moonshot projects nobody asked for.

[giancarlostoro]

Wasn't it always somewhere between 20 to 30% (especially more recently in the 30s) but the real difference is, they're in the billions of dollars, your small business might be in the millions, it's quite a drastic difference altogether.