Looks like the stock is up 11% on this news. Does this and the the staff cuts at X demonstrate you can take out significant numbers of engineer without drastically impairing the user experience?
I doubt most tech execs would have the wherewithal to make this kind of decision but it's clearly the case that many big tech cos staffed up too hard during the pandemic with average salary per employee rising too much
It demonstrates that investors see expenses go down and therefore want to buy more stock.
Whether it's because they believe correctly that Grindr is overstaffed, believe incorrectly that Grindr is overstaffed, or just intend to sell again before the consequences become clear is something that will only become clear in time.
it demonstrates that investors want to see a return on their investment more quickly in a higher cost of capital environment. Look across tech, all of these companies staffed up hard, raised at too high of valuations, and are now fat with slow growth and no profitability.
Even in ZIRP times, layoffs resulted in stock price growth also. See for example Amazon's Feb 2018 layoffs which caused their stock price to jump from $70 to $80.
Depends on the intent. I don't know Flexport's situation, so I can't say this is what happened. But, it's pretty common to parachute in outsiders to do the terrible things you want to do (layoffs, big policy changes, etc) that you know will have an adverse effect on morale. Then, once it's done, you boot the outsiders and commiserate with the masses..."yeah, sorry, clearly that was a bad idea".
I’ve worked for one at Cruise who got “parachuted” like you put it and he was generally well respected as he definitely cleaned up the house there as the company scaled massively - I’d consider working for him again. That is to say it works for some companies but probably not everyone and ymmv depending on who you parachute.
I guess it depends on whether the company owners want to parachute someone in who has outside expertise/experience and can help out, or just someone who's a fall guy.
I think this is kind of a silly thing to say. It's a high risk path to bring in senior leadership - it means you don't have anyone internal you think is good. So it's not surprising when the move fails, whether that external hire was from amazon or anywhere else.
Nice unit economics:
Our Connected Fitness Subscriber Lifetime Value for fiscal 2017, fiscal 2018, and fiscal 2019, was $267.1 million, $604.4 million, and $1,053.8 million, respectively, or $3,433, $4,015, and $3,593 per Connected Fitness Subscriber, respectively.
As we expand our content offering, develop new interactive software features, and grow our community of Members, we believe we can maintain a low Average Net Monthly Connected Fitness Churn, resulting in a high Connected Fitness Subscriber Lifetime Value. In addition, with the growth of our Connected Fitness Subscriber base over time, we expect to improve our Subscription Contribution Margin as we scale our fixed content production costs.
Net Customer Acquisition Cost (profit) can be calculated as Adjusted Sales and Marketing Expense (which excludes depreciation and amortization expense and stock-based compensation expense) less Adjusted Connected Fitness Product Gross Profit (which excludes depreciation and amortization expense and stock-based compensation expense). Our Net Customer Acquisition Costs (profit) for fiscal 2017, fiscal 2018, and fiscal 2019, was $14.2 million, $(4.9) million, and $1.6 million, respectively, or $183, $(33), and $5 per Connected Fitness Subscriber added, respectively. We believe we will continue to drive rapid payback and efficiencies in Net Customer Acquisition Costs (profit) by further leveraging sales and marketing investments as a result of heightened brand awareness and growing word-of-mouth referrals. Changes in Connected Fitness Product margins or sales and marketing expenses may result in an inability to fully offset our customer acquisition costs.
What's amazing is that they get people to pay _more_ than they would - or would even think of paying - for a streaming service like Netflix or Hulu, but their content creation costs are obviously a fraction of what it take to produce even one show on those platforms.
What's really crazy is that the cost of 1 month of a Peloton subscription is less than the cost of 2 spinning classes in a real-world spin studio.
If you spin enough, you actually do save money with a Peloton. $40/month + $2000/bike vs $30/class (in LA/NY/SF) results in a breakeven point of roughly 4 months if you spin every weekday, which many spin aficionados do.
What's really crazy to me is how expensive those spin classes are, how many people go to them, how little they pay the stay, and how all those companies still lose a ton of money!
I thought that was a high number, and I live in a lower-cost market (Atlanta). Looking at one-off/small chain spinning places that do not have outposts in New York State or California, I found single-class pricing to be in the $20-25 range. Given the cost of living difference between here and NYC, the $30 quoted for LA/NY/SF seems on target.
Many gyms have free spin classes as part of their membership and many corporate gyms offer it for free. I taught classes part time all across metro Atlanta for years as a working hobby.
Not to get too "ad-speaky", but people aren't buying something like this to be entertained, they're buying it because it promises them a better life. Peloton aren't selling content, they're selling the idea of being in shape and healthy.
Those "odd comparisons" are the exact thing that make companies like Peloton successful. Another word for that is "disruption"; when you're comparing two markets that don't make sense to compare, and yet here we are with an S-1.
Peloton is a cheap gym and an expensive Netflix, by reasonable comparisons. Damn is that a great business model.
It actually make a profit on their content production. Attending each class in person costs as much as a typical spin class. A back of the envelope estimate says they're probably pulling in $250k+ MRR from the studio alone.
I could never get into Farnam Street because it just seemed like appropriating Charlie Munger's mental models to sell self-help services.
I'm more intrigued by something like Online Great Books (https://onlinegreatbooks.com/) which seems like a lot of effort but would probably force me to widen my knowledge
- In reality, I wish something like Online Great Books included some first principles math/science books to round it out more beyond the philosophy/literature bent.
I haven’t heard of the business you linked to, but the great books program definitely includes math. That’s how I did the Elements and it was transformative.
I think they might literally be the only one? Here's a quote I found (this time on Marginal Revolution):
It should be shocking, but it probably is not, that according to the Rule 606 reports mandated by the U.S. Securities and Exchange Commission, no major online broker, with the sole exception of Interactive Brokers, sent more than 5% of its orders to an organized exchange. More than 95% of their orders go to internalizers!
Later: Like, a minute later I read their Rule 606 report, and they do in fact get rebated for sending order flow to dark pools. They also get paid to take institutional orders and trade them against their customers.
Yea....Timber Hill is owned by Thomas Petterffy, founder of Interactive Brokers, and handles much of the options order flow from IB users. So...IB may not be making money off those trades, but the founder is still profiting from them. Don't get me wrong, as someone who has followed market structure for years, I don't think that IB is doing anything worse than anyone else, but they aren't innocent in this regard.
Timber Hill did not participate in the retail business to avoid conflict of interests with IB.
For what it's worth, one can't internalize options orders in the same way one can equity orders, purchased options flow must make it to the market. I'm not familiar with the history of this decision but I suspect it's since options are less liquid and have higher spreads, so internalization would get a much worse deal than say auctions. You can rebates from certain exchanges for initiating auctions on them, and can selectively initiate auctions on exchanges which benefit you more, but options orders themselves make it to the market
Quite regularly, I see that my orders are filled at Timber Hill, when there are other participants offering at the same price. We may be quibbling over the definition of "internalization", but that is internalization.
It is strictly not internalization, in fact, and as far as I know from friends working on retail at the new owner of Timber Hill IB and Timber Hill didn't ever cooperate on optimal routing strategies since Thomas Pterfry didn't want people loosing faith in IB routing. There are plenty of reasons why Timber Hill might win the trade:
* They might be first in the queue on a price-time exchange, and so naturally get the order
* They might be on a price-size exchange, and so get some of the fill simply by being present.
* They probably participate in the auction process, and will naturally get some portion of orders that IB initiates
For what it's worth, Timber Hill USA was bought by Two Sigma ~1 year ago. It wasn't actually unprofitable as shown by public filings, but wasn't making much and Thomas Pterfry didn't want an illusion of conflict of interest.
What you say about them "winning" the trade is not accurate. If it were happening on an exchange, as in each of your three examples, the trade would show as being on that exchange, and I wouldn't know who the counterparty was. If the exchange is "Timber Hill", then IB chose to route the order there, which is internalization.
If you're talking about the USA, this is incorrect. I actually work in the industry and know how this works
* One has to initiate an auction of the client order, at least in the USA - see https://www.sec.gov/rules/concept/34-49175.htm#P193_52817, specifically "Unlike internalization in the over-the-counter equity market, the options exchanges' rules permit a firm to trade with its own customer's order only after an auction in which other members of that market have an opportunity to participate in the trade at the proposed price or an improved price. This auction provides some assurance that the customer's order is executed at the best price any member in that market is willing to offer". In practice the placing firm will bid for the auction at that price, and non-competitive prices don't get posted since then the firm has to lose money.
* counterparty data is reported by the OCC so regardless of where the order was executed you will know who was the counterparty. It's fairly easy for IB to know whether Timber Hill executed an order, whether or not they intentionally routed it there.
Second, I actually have inside knowledge of a sort about how Timber Hill USA worked before getting purchased by Two Sigma, and they did not work with IB to take customer orders and weren't to happy when they did get customer orders that originated from IB, specifically because people then run around complaining that IB is up to spooky business internalizing with Timber Hill.
Waymo progress seems to be slowing on critical disengagements (in older CA DMV reports these were called "safe operation disengagements" - they stopped reporting this type in 2017). These disengagements deal with perception issues, the software leading to unwanted maneuvers, inability to react to reckless road users, and incorrect predictions.
You can see it reduced rate of improvement when you dig into the numbers:
Personally, I think a self driving car with 1 notified disengagement per year as perfectly usable. Not so useful for the blind, but still very helpful.
That said, even reporting the same number every year could still represent progress if they keep pushing the car harder. AKA, if 2015 = highway driving in the day with nice weather, 2017 = inner city driving at night in a snowstorm the same number of disengagements would still represent a lot of progress.
This is a serious problem if you have to take over during disengagement. If you spend most of the year not driving you risk falling out of practice, and then the one time you must rely on your own skill is in an unusual situation requiring you to exercise good judgement at speed. I would expect most disengagements to result in accidents because of this.
There was a bunch of research on this a while back, essentially saying the driver needs to be paying driving level attention the whole time or the car needs to handle itself completely; you can't just expect someone to go from not driving to driving at 60mph without warning.
I mean, you can probably design autonomous "disengage" modes- hitting the emergency blinkers and heading for the breakdown lane is the extreme default. On a lesser level, the thing could just drive like I do. If a merge is too tricky? Just keep going straight, and recalculate on the next exit.
This is helped by that fact that modern cars seem to have pretty good "Just don't run into something" sensors already, and from my own experience as a bad driver with a decent accident record, not running into other things is most of the battle.
So yeah, I could totally see autonomous cars evolving the ability to safely get themselves off the road. Of course, you're still gonna need to do that a lot less often than every three thousand miles, but you don't have to get it to zero, just around the point where normal cars break down mechanically.
I don't think people are going to enter their destination for every trip. So, people will still do some driving even with self driving systems.
On top of that most situations with disengagement have not resulted in crashes. Really it's failing to pay attention during normal driving that's most often at fault, a 'buzzing you need to pay attention now' system solves most of the problems even if the car is not driving it's self.
You make fair points, but didn't Waymo first show cars with no steering wheel whatsoever as their target? I have only see the Waymo branded vans in recent months, not the tiny custom cars (forgot the name of them).
> Personally, I think a self driving car with 1 notified disengagement per year as perfectly usable.
Funny, I interpret that as one guaranteed accident every year. Because by the time the autopilot disengages you can be sure the driver is after being lulled to sleep for the last 8000+ miles in no position to step into the situation in time to avoid a crash.
You assume crash avoidance is the only reason a car would give up.
Self driving cars however have two goals, not hit anything AND got somewhere specific. It seems likely a car would disengage if it encountered a blocked road even if it did not hit anything. In that context we may see many cases where a car stops and 'gives up' which are in no way safety related and have no real safty risks.
While we don't nessisarily know the specifics, people have been testing these self driving cars for a while and yet crashing seems very rare even with unexpected handoffs.
I would hope in those situations it would just stop and not disengage.
It should remain in control until commanded to disengage. After all, blocked roads will be freed at some point and even if they don't it is the AI's problem to get itself out of any trouble that it got itself into. And even if a blocked road might seem to be free of safety risks that doesn't mean you can abandon the car there, you're supposed to stay in control of the vehicle until it is parked.
The only situation that I can compare disengaging with is when there is stopped traffic in the mountains and the snow moves in, that's one of those situations where you might be ordered by the authorities to abandon your vehicle and seek shelter (assuming this is possible and not less safe than staying with the car). Those situations can take many days to sort out afterwards. But in almost all other situations that normally would occur you should stay in and in control of your car, so I'd assume the same would go for an AI based system.
While that may be desirable if the car is operating alone in production, in testing just about anything it's not sure of should probably result in a disengagement. From my sensors are giving conflicting information with my map, to I failed to read that sign... they all should probably result in a hand off.
After that hand off someone can look at the test data and chose a better response, but caution when operating a deadly vehicle is causation is perfectly appropriate.
Agreed, but in that case it shouldn't be on public roads to begin with. If your software is so bad that the solution to complex situation is to throw up its hands and panic it has no place in traffic. After all, there are plenty of situations where inaction is just as dangerous or even more dangerous than action.
I feel pretty weird in the knowledge that people are operating vehicles with what to me comes across as barely out of beta software on roads shared with others.
Self driving cars safety track record during testing suggests these are already very well designed systems.
I also don't think you can get to self driving cars without testing them on public roads. So far it's been very safe and potentially it's going to save millions of lives so I don't have a problem with this.
Further, these cars are not simply turning off in traffic they are making errors known while continuing to drive as safely as possible. That's vastly safer than suppressing errors which generally results in people ignoring them.
I doubt most tech execs would have the wherewithal to make this kind of decision but it's clearly the case that many big tech cos staffed up too hard during the pandemic with average salary per employee rising too much