zlacker

>>rexree+(OP)
I thought the headline meant that this was going to present Signal as an example of the bloat, but it's the reverse: the article says Signal has only 50 employees but still successfully operates a major communications service, where other companies have thousands of employees.

Apart from Signal just generally doing a good job here, I see a few other possible factors:

* Signal doesn't see user content, so it doesn't have a content moderation team

* Signal is designed in such a way that it can't comply with most kinds of legal requests for user data, so it doesn't need a large team responding to those requests

* Signal gets some amount of pro-bono legal help, so it might not have as large an in-house legal team as other organizations

* Signal isn't trying to directly profit from user activity, so it doesn't need to study user activity or engagement metrics with a view towards profiting from them; similarly, it doesn't need to manage relationships with advertisers

* Similarly, it doesn't need to try hard to grow its user base (that would be desirable, but it doesn't necessarily increase revenue much)

* Similarly, it probably doesn't need to try hard to expand into other business areas

(I think these things are generally great. Yay Signal!)

>>schoen+K2
I agree - this shows Signal in a good light. But it does beg the question what is the real financial incentive discussed in the article for the large tech companies to have such employee bloat? You'd think that employee bloat would be a hindrance to company value but it seems to be the opposite? The more employees it seems the better from a shareholder perspective? It does lead to wild hiring / firing swings but there must be a market logic to it somehow?

>>rexree+33
It makes sense because the market seeks net profit opposed to efficiency or percent profit.

That means it is better to make $101 with 20,000 employees than only $100 with 2 employees.

>>s1arti+5i
I guess another place that's especially apparent is film budgets. Very expensive films are going for a chance of a huge payout. A film studio, or its investors, might very well prefer a 50% chance of a $5,000,000 profit on a $20,000,000 budget than a 70% chance of a $500,000 profit on a $500,000 budget.

>>schoen+tp
>A film studio, or its investors, might very well prefer a 50% chance of a $5,000,000 profit on a $20,000,000 budget than a 70% chance of a $500,000 profit on a $500,000 budget.

That's not how it work: a rational actor would take the $20 million and invest it in 40 different films costing $.5 million each if he could make an expected profit of $.5 million on each of the 40 cheap films.

In other words, a rational economic actor will keep adding employees (or any other expense) as long as adding employees increases profits, but will not keeping adding assets as long as doing so increases profits because assets have opportunity costs.

To account for the opportunity costs, investors commonly speak of return on investment (profit divided by amount invested) rather than profit, because that is really what they're trying to maximize. Recasting what I just wrote in the new, crisper language, the rational actor will add any employee, any other cost and any investment to a firm as long as doing so increases return on investment.

>>holler+3r
Yes, I guess I was implicitly assuming that the investor only had these two options, which might be a good model some of the time, but not typically. You're absolutely right in the more general long-term case.