(Preview) LLM Utilities, Google Disruption, Remote Work Angst, Family Tech Support, and a Thanksgiving Mailbag
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Hello, and welcome to a free preview of sharp tech. Continuing on here, A G, K says, guys, fantastic episode on amErica and the trade status quo at one point during the show band set in passing, that is easier to, quote, develop up. That IT is to develop down.

In other words, someone lower in the value chain like china can develop capabilities higher in the value chain. Whether IT will be harder for silicon valley to learn how to build the lower value chain stuff efficiently, this sort of makes sense and seems to track historically. But I can't put my finger on why that is the case.

Are there structural reasons why this is a rule? If so, i'd be interested to hear them. Any thoughts spent?

I think part of IT is kind of goes back to that google bit before. There is just a financial and margin component to this, where if you're used to having high margins, it's very hard to go back to being low margins. And you know, one of the reasons why no one responded to AWS for a long time is everyone just assumed that was crappy margins like nice play by amazon.

They can handle the little margins. They are making you money. Another story, either it's like and then when the results came out and he was like forty percent margins. So both whether I got I could handle that I could do for you. So there is there is an aspect there. There is a good I don't want to overly speak to the rest of the economy like we went fairly out on a tree branch with that episode and it's i'm wary of of its snapping.

I've wait or work fairly well so far, but there is a bit about tech where in this was a bit I shrine to capture in the podcast that article is tech is addicted to capability and and this is A A big thing where the R N D costs for these companies are astronomic. And yes, they have like all the servers, as if like that I goes to the cost of good sold, but it's all about we can invest so much up front because its scales to the entire world and and and our our stressful market size is seven, eight billion people or sort of what whatever IT might be. And yeah, okay, you are a aller company.

You can scale of two billion people, right? Have you? Like just this is the mindset and approach and software sort of makes this possible.

And again, this everything's interconnected. This ties into silk and valley salaries being so high and in attracting talent. And that talent goes to these places where there's maximum leverage.

And it's like crazy that you're average starting engineer can sort of go to these companies and their total compensation, which includes stocks in the hundreds of thousands of dollars. But IT works out because the leverage on these businesses is so massive and that doesn't necessarily ily exist when I when you're in A A marginal cost. Good, good.

Like making hardware or making things, the scale ability is not the same. And then you just have the the basic sort of like like the capability of manufacturing a computer or putting together what might be IT starts out the whole point of cheap labor is the labor is a commodity and it's sort of predicated on that. And you make decisions going down that road that that assumes that, that is the case.

And then there's a lot of path dependency. What you have built up these capabilities, if you are building the if you're in the marginal cost business, if you're making the computer, whatever IT might be in many aspects makes sense to hold on to all those other capabilities because that keeps your cosmec because if you've internalized this sort of cost, you you're not you're taking away the margins in between. And your samsung, I always talk to about person on the iphone.

They were pretty integrated company too, but they were integrating more sort of they made the phone, they also made the screen and they made a lot of the and sure, they had they were moderate the us. That they took android as the Operating system, but their model was very remains very effective as far as internalizing sort of other costs along the way. Apple pays all its component suppliers.

They are not making the bits and pieces. They're buying the screens. Samsung, they are buying the manufacturing done by foxconn or or quality or whatever might be.

There are different models. And just in general, it's hard to change models. But if you're going to a model that makes you more margin, it's easier.

I mean, that's that's my prevAiling take away from everything you just said. It's a case of show me the incentive and i'll show you the outcome. It's like that makes sense that it's easier to go up the value chain because there's great incentive to develop some of those skills. And going down the value chain in investing a lot of resources and stuff that's gna make you less money is a harder myself for a lot of companies in less, especially when the .

stentiford actly because there's another option that is already doing IT because it's not differentiated IT would actually do. The tent is differentiated. That differentiation is based on efficiency and experience, which you're not going to get efficient experiences.

You're starting out. You you there's always the option to just buy the cheaper one. That's also Better like it's not that that's that's not great.

I IT reminds me of people used to wax poetic about apple on the iphone. Apple is so amazing, just like talking the Roger federal, yeah. They.

like David Foster wallace, say about the Grace .

of apple for exactly the ipod business. The iphone up, we got rid of the ipod through such forward business thinkers. It's like the iphone sold for three times as much.

And I like double the margin that a tough decision right there is an international politics bit where that the ipod team, or whatever IT was, had to be sideline apple. Those as we have a functional organization. So people are always the Better of the company, whatever might be at the other day, not a difficult management decision to like.

So that is sort of us check in a nutley. It's not hard to go up and get a Better business that makes you more money with higher margins. It's harder to go in the opposite direction, particularly win.

To be competitive is about efficiency, is about your cost structure. All these tech companies, their constructions ridiculer went through ya bark a berg year of efficiency. X, Y, Z.

Yes, they slim down. It's like me celebrating my weight loss from my six hundred pounds of five hundred and fifty. It's like, you know it's like, yeah, still living like a king.

Let's be clear. Well, the thought I had the most fascinating act of the trade discussion is one that you hit on explicitly in the article you wrote. And we eluted to IT in a couple different places on the podcast last week.

But chinese own industrial policies have largely worked, you know, like they blocked western companies from entering the market and wound up developing their own massive platform companies and software companies and now software expertise in the E. V. space.

And it's just it's a sort of an interesting object lesson as amErica considers what the next ten years might look like and what some of the U. S. Industrial policies might be able to achieve or might not. As we covered last week.

I feel like this to happen. We've had this discussion in the kinds of what I trust, where the two most important, and I trust bits or or outcomes ever, at least IT in the contest of technology was number one, where a and t basically both formally, informally, they were always suitable across c twenty five. You like.

you want a natural and apply, never case throughout the twenty century and .

a business part of IT. Then I can spend a lot of money on research, and like bell labs, which just make IT freely available. And you got the transistor, we ve got see we to see Brown m language, we got unix.

Just these incredible outcomes of bell labs that was based att. Doing R N D for the nation and giving them away so that they could keep them in out sort of going on. Great outcome as far as like sort of I trust goes yeah the other IBM was was worried about being suit friend I trust.

And so in an attempt to preempt that, they voluntarily split apart the hardware and software businesses, which basically create a modern software market where you could write a program for another company's hardware, and they got suit. Anyway, the dust department wasn't wasn't impressed. Incredible outcome.

Both cases kind of by accident. Not really the point. That's how I kind of feel about china, the great firewall, great industrial policy.

Absolutely not sure that industrial policy was the driving factor in doing that, even though been one of the again, of course, I hate the concept, the great firewall and all those sorts of pieces from sort of a political or personal perspective from industrial policy. Fantastic outcome. And I think completely accidental.

Great job weaving there. I wasn't sure how you were going to tie the any trust outcomes to china's great firewall, but IT landed a hundred percent for me. alright.

We are now moving to the non tech questions. We promise non tech questions. This is actually sort of a hybrid, max says.

Been in Andrew, I graduated this may from U. W. Medicine and just started watch.

What's that as I go badgers.

go badgers.

Absolutely badger. Baseball, football.

Go to say a rough, a rough year on the great iron for the badgers and just started working as a software engineer this fall for a defense company and washing in dc. Welcome to the city, max. I move for this job as I was under the impression I would be in person, but I got put on a remote team, and I might go insane if I have to keep working remote.

I knew this job was most likely a stepping stone to another company, and I was the best I could do with this job market. However, I am now having second thoughts about a career as a software engineer as remote work culture becomes more prevalent. I'm sure this is all a bit premature, res, since there are opportunities for software engineers in person, but none the less in person work is a priority I hadn't considered until now.

My plan is to move back to medicine moy. Farewell, max. And then try getting a person job.

It's cold, you know this.

be warned. Well, well, yeah, that's right. He was there. And and then try getting an in person job with maybe an early stage company somewhere in sciences. Go or seattle.

Should I be this concerned about working in person and or with people I like or more focused on the actual work i'm doing? And more broadly speaking, how do you see work culture shifting for new grads? And what might be some of the second and third order consequences we see? So the last question, there is a pretty big one. I don't know we're going to be able to wrap our arms around that at this point, but do you have any advice for max in terms of his calculus going forward?

The remote thing is i'm just the worst person to talk to. Because i've been remote for for ages. Obviously, there's a lot of talk about this online and sort of back.

And fourth, I do feel very bad for people like max, new college grads in particularly its super obviously working on motes amazing when you are establishing your career and you have a family in your irons, you have to run when you're starting out and you're just trying to gain experience and make friends and whatever you might be, uh, it's pretty brutal and definitely sucks. And I do worry in the long run you as I mention that I joked about, team is getting more efficient. There is a bit teams are using a lot of A I the first short, they're on the cutting edge of a lot of this sort of stuff.

And is there a concern you would start out to suffer, you to get a job at a big tech company and then you meet people and then you could get into a start up, right? How do you get into a start up from medicine when you weren't able to get a job at a google or facebook first and then beat people, make, build a network and then sort of go go into something interesting? Number one, IT sucks for max.

That is that going to suck in the long run for the ecosystem in terms to sort of getting people in finding the next generation, all those pieces. I think those those are all legitimate concerns. And there's also the bit where I did is there are pulling up the latter aspects where you have senior people to have this remote things pretty great.

Oh, by the way, once or remote, what do we just a higher developers in india develops in in, in the phillipines or whatever IT might be, or south america. We want to have a closer time zone. And then, oh, we're formalizing all this work, which kind of sucks.

And we have to like, specify everything out, communicate more clearly. Oh, I can communicate with an A I and sort of to do this, right? Like there is there there is definitely a question as far as that sort of thing goes.

And I don't know, I I don't I don't know the answer to IT. Again, I hesitate to antiquated on this. I will say there were times where I didn't realized until afterwards that I was getting into a Better stay personally because I was deficient in sort of in person interaction.

This, to get to your broader philosophical point, I don't think is particularly healthy. That work is your life and that's where you find friends and fellowship and whatever you might be. It's also kind of just a reality of our culture.

And especially .

and especially .

if if you're in a new city like max moving to washington, dc, probably didn't know that many people here, like Normal people, used to just meet at the office and go out for drinks and that was like not an entire social life but there was .

a big part of this or something yeah yeah I mean.

that might take ways I don't know the software engineering market um but max is not wrong for prioritizing in person work experience because for me when I was writing, I benefit a tn from being around other writers in an office, being able to talk to editors one I want go get coffee if like all of that is really useful and harder to do over email or over I mean, IT was g chat when I was writing.

I don't know how people communicate now, maybe slack, probably slack. But when I was a lawyer, I was also, I was trying to learn during covet. And thank god I had another partner at my law firm who was the only other person at the firm who he sort of served as a mentor d to me anyways, but he was willing to come into the office.

And you can just learn so much more sitting across a conference table than you do replying to an email chain or something like that. So you really do develop both hard and soft skills working alongside other humans in an office. But also, IT was just, I mean, if I go back to cove, IT like IT was so much Better for my mental health to get out of my own house and talk to humans, even if it's just like this one other partner at people at starbucks and stuff like that.

Interacting with the world is an important thing. And that's what I worry about most as remote culture comes to sort of predominate. But honestly, IT seems like things are swing in the other way these days.

A lot of people to everywhere. Yes, this bit about the next generation and training and helping people sort of to the extent test set knowledge matters is the extent that in person interaction matters. And I think there there's a chance that companies are entities or industries end up shooting themselves in the foot to a certain respect because they're so worried about their short term comfort and avoid a commute, they end up sort of formalizing themselves out of a competitive position.

It's like, like I could get this exact like, if I need to go to all the trouble to be mediated via sum calls and slack messages, why am I gonna do with, you know, oh, guess of nationalistic, patriotic american take. But like, that's not a great recipe for major competitive ess. It's like what we informal lize the process.

We can do all the sort of thing. We can move this manufacturing to another country with the labor cost cheaper. yeah.

And wait, there's sort of widespread regret about that. We've been talking about that. And here we go, just create the conditions to do IT all over again.

Or are we because IT seems like a lot of people are saying, you know what, there are some things that we can't necessarily measure. Let's bring people back in office, bring them back kicking and screaming if we have to. So time will tell on how all of this shakes out a max.

I hope you find some place that will let you do some software engineering in person alongside other humans because it's good for a lot of different reasons. And a good email evy, says ben and Andrew. I've long held the belief that if the tratement ory bundle cost thousands of dollars, I would still happily subscribe.

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