The tech industry has been under the spell of cargo cult cheap investment money for the better part of two decades. The most cynical but simple and probable reason they have 2000 employees is because almost every other tech company has about 10x-20x the number of employees they actually need to be sustainable and profitable companies.
TLDR: they’re throwing shit at the wall until something sticks
So they’re just doing what everyone else is doing. It would look very suspicious to investors if leadership said “You know what, we actually can run this thing with a team of 100 people and make a few tens of millions in profit a year!”. That’s not what investors want to hear. They want to hear “If we have a 100 person company making a few tens of millions in profit a year, imagine how much revenue we could make if we were ten times bigger. We can easily scale operations!”.
Investors want the kind of financial growth that would make cancerous tumour cells envious. And most tech leaders have figured out with cheap money that the best strategy for obtaining this growth is by having smart people throw shit at the wall until something sticks. The more smart people you have throwing shit at the wall, the better your chances at stumbling on a product or service that levels up your company.
If a tech leader were just content with running a sustainable and profitable business at the end of its growth curve, they wouldn’t need as many employees. They just need the ones who can keep the core business going because there’s nobody working on new venture pet projects.
But investors aren’t interested in that because that’s like putting their money into a savings account at a bank except with a lot more risk of losing it all. Right now, Reddit’s investors are starting to realize that their risky investment with a chance at winning it big is looking a lot more like a dud that will pay out more meagre returns or worse, may not pay out at all. They desperately need an IPO to win it big. It’s their last hope.
The investors won’t throw any more money at Reddit and are at the stage where they’re pressuring the leadership to start cracking the whip. The leadership has now removed any illusion of wanting to make Reddit users happy because we aren’t their customers or investors. They need their customers and their investors happy. They don’t need Reddit users to be happy. They just need to keep them hooked.
The tech industry has been under the spell of cargo cult cheap investment money for the better part of two decades. The most cynical but simple and probable reason they have 2000 employees is because almost every other tech company has about 10x-20x the number of employees they actually need to be sustainable and profitable companies.
TLDR: they’re throwing shit at the wall until something sticks
So they’re just doing what everyone else is doing. It would look very suspicious to investors if leadership said “You know what, we actually can run this thing with a team of 100 people and make a few tens of millions in profit a year!”. That’s not what investors want to hear. They want to hear “If we have a 100 person company making a few tens of millions in profit a year, imagine how much revenue we could make if we were ten times bigger. We can easily scale operations!”.
Investors want the kind of financial growth that would make cancerous tumour cells envious. And most tech leaders have figured out with cheap money that the best strategy for obtaining this growth is by having smart people throw shit at the wall until something sticks. The more smart people you have throwing shit at the wall, the better your chances at stumbling on a product or service that levels up your company.
If a tech leader were just content with running a sustainable and profitable business at the end of its growth curve, they wouldn’t need as many employees. They just need the ones who can keep the core business going because there’s nobody working on new venture pet projects.
But investors aren’t interested in that because that’s like putting their money into a savings account at a bank except with a lot more risk of losing it all. Right now, Reddit’s investors are starting to realize that their risky investment with a chance at winning it big is looking a lot more like a dud that will pay out more meagre returns or worse, may not pay out at all. They desperately need an IPO to win it big. It’s their last hope.
The investors won’t throw any more money at Reddit and are at the stage where they’re pressuring the leadership to start cracking the whip. The leadership has now removed any illusion of wanting to make Reddit users happy because we aren’t their customers or investors. They need their customers and their investors happy. They don’t need Reddit users to be happy. They just need to keep them hooked.