Imagine you're in charge of Google Search in like 2005. You've got a killer product that could probably be run realistically by 50 extremely good engineers working efficiently. Take out server costs, what's your profit margin, like 99%? Well if you're the board, and you've got a 99% profit company, what do you do? On the one hand you can get rich and call it a day, but then how long before a competitor builds the same exact product and you lose half? Or lose everything if everyone switches?
So you take a huge chunk that money and reinvest it with the hope of cementing your position or finding another product.
At this stage there's tons of money flying around. Internal projects are started and stopped constantly. Extreme inefficiencies are tolerated, after all, as the business grows, plenty of people just want to get paid and do as little work as possible.
Imagine you're in charge of Google Search in like 2005. You've got a killer product that could probably be run realistically by 50 extremely good engineers working efficiently. Take out server costs, what's your profit margin, like 99%? Well if you're the board, and you've got a 99% profit company, what do you do? On the one hand you can get rich and call it a day, but then how long before a competitor builds the same exact product and you lose half? Or lose everything if everyone switches?
So you take a huge chunk that money and reinvest it with the hope of cementing your position or finding another product.
At this stage there's tons of money flying around. Internal projects are started and stopped constantly. Extreme inefficiencies are tolerated, after all, as the business grows, plenty of people just want to get paid and do as little work as possible.