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Mulling on this, but I think this is a good take.

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May 30, 2021

Bear in mind that "profit" is always an opinion. It's easy for cloud repatriation to look great margin-wise because labor costs are up to interpretation (COGS vs R&D, etc), whereas third-party API (i.e. cloud) spend is unequivocally COGS. Long term EV is what matters. 5/n

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7:29 PM · Jun 2, 2021Tweetbot for iΟS

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Of course, the irony is that StackOverflow, which was acquired today for $1.8 billion, runs on a tiny handful of on-prem servers — a stack that is fundamentally unchanged since 2016. nickcraver.com/blog/2016/03/2

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I think he's usually right, but is overly absolutist. Dropbox's Power (in the Helmer sense) is pretty much entirely switching costs for their existing customers. Given thats the case, they should be willing invest a lot in cost reduction...

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and

Unlike a new startup, they have low uncertainty way to increase cashflows by optimizing. New startups should be focusing on innovating their way to Power, and focusing on compute costs is a distraction. But to ignore cost reductions when you're Dropbox scale is wasteful.

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