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Instagram’s CEO

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Re: Instagram’s CEO

#51

Post by eldavido »

kbenson wrote: post #43
billmalarky wrote: post #33

Earlier quoted context omitted.

To be fair, they also had $700 MM in FB stock (now worth $4b according to the article), so there was incentive to help instagram succeed at FB.

I've always wondered about this. How much inventive is that? When the person thinks "if I work really hard and this, I'll increase my huge pool of money from an amount I can't easily spend given the rest of my life to an amount almost six times as much!", does that really resonate? It's not like it's the same as $700 to $4,000, or even from $7,000,000 to $40,000,000. There are things you can buy to spend most of thos…

I'm not that rich. That said, two thoughts.

First, money at at level isn't earned to spend -- you're right about this. It's more a way of signaling status. Someone getting paid $30 million is less important than someone getting paid $40 million at the same company. This comes up a lot in athletics, too. It establishes your location in the pecking order, which is important in any hierarchical organization. You have to know who's boss.

Second, I think money can be a basis for talent competition. If one company offers $5mil/year and another offers $10mil, you'll probably take the $10 over the $5. Not that it will actually make a difference in your life, but just because it's 2x as much. Perhaps not everyone would make that choice and I think at those levels of wealth, it becomes quite a personal, idiosyncratic decision. But it does get hard to turn down.

Just some thoughts from a guy who isn't that rich.

Re: Instagram’s CEO

#52

Post by abakker »

mooreds wrote: post #49
eldavido wrote: post #38

Earlier quoted context omitted.

I am a daily reader of Stratechery. It's a very "MBA" publication: the emphasis is always on strategy, distribution channels, markets, sales and marketing, etc. It's a soberingly different worldview than product-obsessed, hacker/maker/developer-centric worldview you get on HN a lot of the time. HN definitely skews toward the entrepreneurial/business end of software, but there's still a real emphasis on building great…

> I think the best products do tend to win. Ah, you optimist, you! :) I think that if you expand the definition of product to include sales and marketing, the answer is yes. But if you don't, the world is littered with great products that lost to better competition: betamax to vhs, apple to windows. Though I can't think of any modern examples, so maybe the world has changed.

information dissemination with the internet is drastically better than when MacOS lost to Windows, or when Betamax lost to VHS. Nowhere is this more apparent than in cars, where manufacturers are held accountable by numbers, reviews, and even interior design decisions that might have been ignored 20 years ago when a magazine wouldn't spend the pages to complain in detail about why you shouldn't have highly reflective chrome trim on the dashboard.

I think good, differentiated products have a better chance now than ever, but the differentiation is where things fall flat. Barriers to entry are lower across the board, but having differentiation is the key to funding/pipeline, which is the key to scaling.

Re: Instagram’s CEO

#53

Post by eldavido »

6stringmerc wrote: post #50
eldavido wrote: post #38

Earlier quoted context omitted.

I am a daily reader of Stratechery. It's a very "MBA" publication: the emphasis is always on strategy, distribution channels, markets, sales and marketing, etc. It's a soberingly different worldview than product-obsessed, hacker/maker/developer-centric worldview you get on HN a lot of the time. HN definitely skews toward the entrepreneurial/business end of software, but there's still a real emphasis on building great…

Very interesting perspective and glad you tied together the disparate lines of thinking. Merit in product is, unfortunately, a variable not predictive of success. The strategy component is critical - that is a beautiful, great product that is solving a non-existent problem is probably doomed. There's no path to riches designing the best roller skate wheel marketplace platform, but even a poorly designed gambling tool…

I agree 100%.

Another point: we're actually talking about strategy (Stratechery/MBA worldview) vs. operations (build the best product, do things well -- HN view). This is a well-worn argument in business circles and it's funny to see it manifest here under a different name. http://www.davidralbrecht.com/notes/2018/09/strategy.html

Hackers are operators :)

I get the sense that strategy vs. operations matters differently depending on the characteristics of the business. I don't really have a coherent articulation of this point yet. It might change over time (something Ben suggests in today's post), or perhaps based on industry maturity or type of product, or market concentration. But it feels like something where people are arguing and are both right, because their arguments are insufficiently qualified/scoped (X is true vs. X is true when Y, Z are true).

Re: Instagram’s CEO

#54

Post by Mahn »

eldavido wrote: post #38
mooreds wrote: post #17

This is a sobering look at what it takes to build a business vs a product (vs, even smaller scale, a feature). You have to be willing to put in the long hours (err, years) and the schlepping to do all the business-y stuff: * distribution * monetization * back end systems for admin users * sales channels etc, etc Or, you can cash out and assimilate, err integrate, with a larger company that has done that hard work and…

I am a daily reader of Stratechery. It's a very "MBA" publication: the emphasis is always on strategy, distribution channels, markets, sales and marketing, etc. It's a soberingly different worldview than product-obsessed, hacker/maker/developer-centric worldview you get on HN a lot of the time. HN definitely skews toward the entrepreneurial/business end of software, but there's still a real emphasis on building great…

> "It's not the technology that matters, it's the strategy". I don't think that's right. A big talking point that comes up over and over with Instagram was how well-built the app was.

Yet that wouldn't have mattered if they hadn't pivoted from a location based app to photo sharing. Technology/product matters to get your foot in the door, but it's strategy/execution what ultimately makes it or breaks it.

Re: Instagram’s CEO

#55

Post by JacobDotVI »

kbenson wrote: post #43
billmalarky wrote: post #33

Earlier quoted context omitted.

To be fair, they also had $700 MM in FB stock (now worth $4b according to the article), so there was incentive to help instagram succeed at FB.

I've always wondered about this. How much inventive is that? When the person thinks "if I work really hard and this, I'll increase my huge pool of money from an amount I can't easily spend given the rest of my life to an amount almost six times as much!", does that really resonate? It's not like it's the same as $700 to $4,000, or even from $7,000,000 to $40,000,000. There are things you can buy to spend most of thos…

I'm not sure about the psychology of incentives angle, but this old post from reddit shows the monumental difference in wealth between $700M and $4B:

https://www.reddit.com/r/AskReddit/comments/2s9u0s/what_do_i...

Re: Instagram’s CEO

#56

Post by character0 »

abakker wrote: post #52
mooreds wrote: post #49

Earlier quoted context omitted.

> I think the best products do tend to win. Ah, you optimist, you! :) I think that if you expand the definition of product to include sales and marketing, the answer is yes. But if you don't, the world is littered with great products that lost to better competition: betamax to vhs, apple to windows. Though I can't think of any modern examples, so maybe the world has changed.

information dissemination with the internet is drastically better than when MacOS lost to Windows, or when Betamax lost to VHS. Nowhere is this more apparent than in cars, where manufacturers are held accountable by numbers, reviews, and even interior design decisions that might have been ignored 20 years ago when a magazine wouldn't spend the pages to complain in detail about why you shouldn't have highly reflective…

I generally agree with this, but it really depends on the consumer not being lazy. We all have the friend that scours the forums, but 10x more friends that just buy the highest rated item on Amazon.

Re: Instagram’s CEO

#57

Post by dionidium »

kbenson wrote: post #43
billmalarky wrote: post #33

Earlier quoted context omitted.

To be fair, they also had $700 MM in FB stock (now worth $4b according to the article), so there was incentive to help instagram succeed at FB.

I've always wondered about this. How much inventive is that? When the person thinks "if I work really hard and this, I'll increase my huge pool of money from an amount I can't easily spend given the rest of my life to an amount almost six times as much!", does that really resonate? It's not like it's the same as $700 to $4,000, or even from $7,000,000 to $40,000,000. There are things you can buy to spend most of thos…

> but those are things it's not really worth buying multiple of (e.g. houses, super yachts)

Don't think consumer goods. Think:

* own and run a professional sports team

* spearhead a transit project in your hometown

* build 100 libraries with your name on them

* influence politics for a generation

* fund the cure for the rare disease that killed your mother

If all you can think to do with a few billion extra dollars is buy more consumer goods, you're not using your imagination.

Re: Instagram’s CEO

#58

Post by qdigital »

briandear wrote: post #39
mooreds wrote: post #21

Earlier quoted context omitted.

It depends. Do you still need product geniuses when you have distribution and monetization nailed?

Salesforce proves that you don’t.

Consumer tech is a different beast though and subject to stronger reactionary market forces and whiplash vs enterprise.

Re: Instagram’s CEO

#59

Post by storgendibal »

eldavido wrote: post #38
mooreds wrote: post #17

This is a sobering look at what it takes to build a business vs a product (vs, even smaller scale, a feature). You have to be willing to put in the long hours (err, years) and the schlepping to do all the business-y stuff: * distribution * monetization * back end systems for admin users * sales channels etc, etc Or, you can cash out and assimilate, err integrate, with a larger company that has done that hard work and…

I am a daily reader of Stratechery. It's a very "MBA" publication: the emphasis is always on strategy, distribution channels, markets, sales and marketing, etc. It's a soberingly different worldview than product-obsessed, hacker/maker/developer-centric worldview you get on HN a lot of the time. HN definitely skews toward the entrepreneurial/business end of software, but there's still a real emphasis on building great…

Ben also said in today's update that the "relative importance decreases over time as things like network effects and business models come to bear". This is another way of putting Marc Andreesen and Steven Sinofski's point that if you have product / market fit, then you can do almost everything wrong and it won't matter. I think Ben gets that the tech and product are the only thing that matters pre-PMF, but post-PMF, all the grungy business stuff becomes the high order bit in order to build a business.

Re: Instagram’s CEO

#60

Post by southerndrift »

kbenson wrote: post #43
billmalarky wrote: post #33

Earlier quoted context omitted.

To be fair, they also had $700 MM in FB stock (now worth $4b according to the article), so there was incentive to help instagram succeed at FB.

I've always wondered about this. How much inventive is that? When the person thinks "if I work really hard and this, I'll increase my huge pool of money from an amount I can't easily spend given the rest of my life to an amount almost six times as much!", does that really resonate? It's not like it's the same as $700 to $4,000, or even from $7,000,000 to $40,000,000. There are things you can buy to spend most of thos…

Space exploration, artificial intelligence, architecture, art - there are enough bottomless pits on which you can spend endless amounts of money. Money is not only about consumption but also about creation. If you are into creativity then you have to stay around until you have made enough money for your goals.
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