12 ms·

Unity really showing the world how to tank a business by letting a few MBA’s at the top make a decision for profit.

by asynchronous 3y ago

ethbr1 3y ago
^H^Hby going public without a business model.
- dbingham 3y ago
  I feel like we've seen a bunch of businesses show what happens when you take private capital and scale on a community based product with out a clear business model that doesn't involve retroactively screwing the community in some way. I mean, Unity's just the latest example. Before it came Hashicorp and Docker. I'm sure we could think of many more examples if we tried. And what's really frustrating is that if these businesses had focused on simply "building a product the community wanted, supporting that community, and making enough money to comfortably keep going" - all of them could have been successful. I'd really love to see the tech community try more models that simply aim for comfortable sustainability - not astronomical growth. You know, enough to pay a modest engineering team market salaries indefinitely while they continue to support and develop the product.
  - rmelton 3y ago
    My company is actively using this model now. It's really hard watching competitors raise multi-million dollar rounds though.
    - Eisenstein 3y ago
      Unless your plan is to vest and cash out, you shouldn't envy them.
      - ethbr1 3y ago
        That's why it happens so often though -- the very people who are directly enriched by doing it (holders of the majority of the company's equity) are the only ones asked to decide to do it (board votes). Canonical example: MailChimp The founders retained essentially all the equity (Atlanta), so when push came to shove they decided "Fuck it, we'd rather be rich than work" and sold the company. It feels like the only way to avoid this would be aligning the equity structure with employees and customers in a better way.
  - dylan604 3y ago
    VCs don't like this. How are they going to get their ROI immediately? Having normal investors vs funders changes the mentality of long term to cash grab.
  - harpiaharpyja 3y ago
    Exactly. I think what we are seeing is the result of decision makers at these businesses now having to report to investors who are essentially outsiders to the community. Their only stake or interest in the operation comes from having dumped a bunch of money into it. But now they get to call the shots or if not, exert a ton of pressure. I think the takeaway is that businesses built around a community really should not go public.
- qwytw 3y ago
  They have a business model and they would've been fine if they hadn't started increasing their headcount by 50% every year and focused on their core products.
dylan604 3y ago
i remember back when Avid decided they were no longer going to offer a Mac version of their NLEs because Apple's new machines were only going to have 3 expansion slots. while admittedly, there were probably a much smaller number of affected users than the Unity decision, it did cause a huge amount of turmoil. urban legend has people dumping their Avid stations on the doorstep of the Avid offices. Avid survived. Unity will too
- raytopia 3y ago
  Unity will survive but this could be the start of a steady decline of users, which isn't good for any game engine. Leads to a loss of knowledge which makes the engine even less popular. Ghe whole situation is somewhat similar to when GameMaker Studio switched to subscription model.
  - dylan604 3y ago
    what would be better for the community would be not just a decline in devs using the engine, but also the devs working on the engine. working for Unity should now be a stain just like working for FB/socials/ad-tech. there will be tons of people willing to do it, but hopefully the great minds leave the rot
    - ditonal 3y ago
      That’s the opposite of what would be better. We need more engineer solidarity not more divisiveness. Give me a list of your past employers and I can guarantee I can find some sketchball business practice you indirectly contributed to and make some tenuous argument for you to be blackballed. 95% of shitty tech industry practices can be root caused to people identify more strongly with their employer than with their profession. We desperately need a professional organization / union with teeth and the main thing that should be shunned is rhetoric that divides rather than unites it . Engineers can hang together or hang separately.
      - dylan604 3y ago
TylerE 3y ago
To play devil's advocate... Unity isn't close to profitable, and never has been. At some point money has to be made or the lights get turned off.
- generalizations 3y ago
  Well, that kinda makes sense then. If they weren't profitable, then this could be seen as a last-ditch survival strategy.
  - gs17 3y ago
    This strategy is still pretty awful. If 2.5% revenue share after $1,000,000 would be enough to survive on, they probably could have opened with matching Unreal's 5% instead of all the bullshit and won people over.
    - kevingadd 3y ago
      Yeah their new pricing model is quite literally more expensive than Unreal for many of their customers (mostly the ones who make less money - for massive studios it's cheaper) and it's ALSO more complex to comply with. A simple "we're doing revshare now, and the per-seat fee is going away" would have been viewed more favorably I think.
      - tetha 3y ago
        I mean in my naive world, you'd slap some minimum revenue onto the rev-share and you'd have a clear separation between hobbyists, unsuccessful indies, indies, and huge successes. It'd be muddled in the middle, sure, but if some companies hits jackpot with a unity project, you'll know and could act on it.
        TylerE 3y ago
        That's what they did though. It was several hundred thousand dollars in revenue before any of it kicked in.
harpiaharpyja 3y ago
This "for profit" thing seems like the wrong framing. Customer goodwill and community are extremely valuable. It seems like what we are looking at is more about short-termism and the distortive effects of suddenly (post-IPO) having to report to investors who are essentially outsiders to the business and have no knowledge or stake in the operation-as-an-entity-in-a-larger-ecosystem other than having dumped a bunch of money into it. Sure, you can argue that said investors are treating the business as nothing but a vehicle "for profit", but that framing loses something essential. You can have profit and be a player in something mutually beneficial. In fact you need profit to be sustainable.
- finite_depth 3y ago
  [dead]
- andrewflnr 3y ago
  Yep, it's not profit motive that's the problem, but short term profit above all else, including long term profit. Because in the long term, whoever is making the decision will already be gone.
  - willis936 3y ago
    I wonder how the investors are feeling about their decisions.
    - andrewflnr 3y ago
      They feel bad about the individual losses, but haven't noticed their role in the pattern yet.
rmbyrro 3y ago
Expect MBAs to show up here condemning the derogatory use of MBA
- troymc 3y ago
  Main-belt asteroids don't have a very cohesive lobby group.
  - rmbyrro 3y ago
    MBA asteroids are well motivated on their own. No need for asteroid cohesion to complain on HN
- dingosity 3y ago
  FWIW, I have an MBA and Unity's behaviour doesn't make sense to me either. Oh... and... "Not all MBAs"
  - rmbyrro 3y ago
    To me, at least, you and even MBAs that like Unity's behavior are welcome here. It's essential to understand broad perspectives, especially the ones I dislike.
    - dingosity 3y ago
      I probably should have led with "I spent 35 years as a software developer and THEN got an MBA." Which is to say... when I make snarky comments, they're firmly grounded on basic comp sci and extensive software dev experience. However, When I show the kids at work how to use old-school command line tools like awk, sed, cut, grep and find, I leave off the bit that they've been educated by an MBA.
indymike 3y ago
> letting a few MBA’s at the top make a decision for profit. I'm not sure the profit part will work out for them in the long run.
- asynchronous 3y ago
  Really I should have stated “short term profits”
- dagw 3y ago
  Don't worry, most of the people making and approving these decisions aren't there for the long run either.
hcks 3y ago
And by tank a business you mean trying to increase revenues to stop losing 500 millions a year I guess
- dpig_ 3y ago
  Yes - trying to do so in a way that tanks the business and loses them even more.

Unity really showing the world how to tank a business by letting a few MBA’s at the top make a decision for profit.

ethbr1 3y ago

^H^Hby going public without a business model.

dbingham 3y ago
I feel like we've seen a bunch of businesses show what happens when you take private capital and scale on a community based product with out a clear business model that doesn't involve retroactively screwing the community in some way. I mean, Unity's just the latest example. Before it came Hashicorp and Docker. I'm sure we could think of many more examples if we tried. And what's really frustrating is that if these businesses had focused on simply "building a product the community wanted, supporting that community, and making enough money to comfortably keep going" - all of them could have been successful. I'd really love to see the tech community try more models that simply aim for comfortable sustainability - not astronomical growth. You know, enough to pay a modest engineering team market salaries indefinitely while they continue to support and develop the product.
- rmelton 3y ago
  My company is actively using this model now. It's really hard watching competitors raise multi-million dollar rounds though.
  - Eisenstein 3y ago
    Unless your plan is to vest and cash out, you shouldn't envy them.
    - ethbr1 3y ago
      That's why it happens so often though -- the very people who are directly enriched by doing it (holders of the majority of the company's equity) are the only ones asked to decide to do it (board votes). Canonical example: MailChimp The founders retained essentially all the equity (Atlanta), so when push came to shove they decided "Fuck it, we'd rather be rich than work" and sold the company. It feels like the only way to avoid this would be aligning the equity structure with employees and customers in a better way.
- dylan604 3y ago
  VCs don't like this. How are they going to get their ROI immediately? Having normal investors vs funders changes the mentality of long term to cash grab.
- harpiaharpyja 3y ago
  Exactly. I think what we are seeing is the result of decision makers at these businesses now having to report to investors who are essentially outsiders to the community. Their only stake or interest in the operation comes from having dumped a bunch of money into it. But now they get to call the shots or if not, exert a ton of pressure. I think the takeaway is that businesses built around a community really should not go public.
qwytw 3y ago
They have a business model and they would've been fine if they hadn't started increasing their headcount by 50% every year and focused on their core products.

dylan604 3y ago

i remember back when Avid decided they were no longer going to offer a Mac version of their NLEs because Apple's new machines were only going to have 3 expansion slots. while admittedly, there were probably a much smaller number of affected users than the Unity decision, it did cause a huge amount of turmoil. urban legend has people dumping their Avid stations on the doorstep of the Avid offices. Avid survived. Unity will too

raytopia 3y ago
Unity will survive but this could be the start of a steady decline of users, which isn't good for any game engine. Leads to a loss of knowledge which makes the engine even less popular. Ghe whole situation is somewhat similar to when GameMaker Studio switched to subscription model.
- dylan604 3y ago
  what would be better for the community would be not just a decline in devs using the engine, but also the devs working on the engine. working for Unity should now be a stain just like working for FB/socials/ad-tech. there will be tons of people willing to do it, but hopefully the great minds leave the rot
  - ditonal 3y ago
    That’s the opposite of what would be better. We need more engineer solidarity not more divisiveness. Give me a list of your past employers and I can guarantee I can find some sketchball business practice you indirectly contributed to and make some tenuous argument for you to be blackballed. 95% of shitty tech industry practices can be root caused to people identify more strongly with their employer than with their profession. We desperately need a professional organization / union with teeth and the main thing that should be shunned is rhetoric that divides rather than unites it . Engineers can hang together or hang separately.
    - dylan604 3y ago

TylerE 3y ago

To play devil's advocate... Unity isn't close to profitable, and never has been. At some point money has to be made or the lights get turned off.

generalizations 3y ago
Well, that kinda makes sense then. If they weren't profitable, then this could be seen as a last-ditch survival strategy.
- gs17 3y ago
  This strategy is still pretty awful. If 2.5% revenue share after $1,000,000 would be enough to survive on, they probably could have opened with matching Unreal's 5% instead of all the bullshit and won people over.
  - kevingadd 3y ago
    Yeah their new pricing model is quite literally more expensive than Unreal for many of their customers (mostly the ones who make less money - for massive studios it's cheaper) and it's ALSO more complex to comply with. A simple "we're doing revshare now, and the per-seat fee is going away" would have been viewed more favorably I think.
    - tetha 3y ago
      I mean in my naive world, you'd slap some minimum revenue onto the rev-share and you'd have a clear separation between hobbyists, unsuccessful indies, indies, and huge successes. It'd be muddled in the middle, sure, but if some companies hits jackpot with a unity project, you'll know and could act on it.
      - TylerE 3y ago
        That's what they did though. It was several hundred thousand dollars in revenue before any of it kicked in.

harpiaharpyja 3y ago

This "for profit" thing seems like the wrong framing. Customer goodwill and community are extremely valuable. It seems like what we are looking at is more about short-termism and the distortive effects of suddenly (post-IPO) having to report to investors who are essentially outsiders to the business and have no knowledge or stake in the operation-as-an-entity-in-a-larger-ecosystem other than having dumped a bunch of money into it. Sure, you can argue that said investors are treating the business as nothing but a vehicle "for profit", but that framing loses something essential. You can have profit and be a player in something mutually beneficial. In fact you need profit to be sustainable.

finite_depth 3y ago
[dead]
andrewflnr 3y ago
Yep, it's not profit motive that's the problem, but short term profit above all else, including long term profit. Because in the long term, whoever is making the decision will already be gone.
- willis936 3y ago
  I wonder how the investors are feeling about their decisions.
  - andrewflnr 3y ago
    They feel bad about the individual losses, but haven't noticed their role in the pattern yet.

rmbyrro 3y ago

Expect MBAs to show up here condemning the derogatory use of MBA

troymc 3y ago
Main-belt asteroids don't have a very cohesive lobby group.
- rmbyrro 3y ago
  MBA asteroids are well motivated on their own. No need for asteroid cohesion to complain on HN
dingosity 3y ago
FWIW, I have an MBA and Unity's behaviour doesn't make sense to me either. Oh... and... "Not all MBAs"
- rmbyrro 3y ago
  To me, at least, you and even MBAs that like Unity's behavior are welcome here. It's essential to understand broad perspectives, especially the ones I dislike.
  - dingosity 3y ago
    I probably should have led with "I spent 35 years as a software developer and THEN got an MBA." Which is to say... when I make snarky comments, they're firmly grounded on basic comp sci and extensive software dev experience. However, When I show the kids at work how to use old-school command line tools like awk, sed, cut, grep and find, I leave off the bit that they've been educated by an MBA.

indymike 3y ago

> letting a few MBA’s at the top make a decision for profit. I'm not sure the profit part will work out for them in the long run.

asynchronous 3y ago
Really I should have stated “short term profits”
dagw 3y ago
Don't worry, most of the people making and approving these decisions aren't there for the long run either.

hcks 3y ago

And by tank a business you mean trying to increase revenues to stop losing 500 millions a year I guess

dpig_ 3y ago
Yes - trying to do so in a way that tanks the business and loses them even more.