Sriram Krishnan

While not directly related, fellow readers might also find the memo titled "Dave Goldberg on music"[1] to be an interesting prediction around the future of music as it comes to streaming.

As a bit more background, it was a memo sent to then-CEO of Sony Entertainment Michael Lynton by Dave Goldberg[2] who was most recently known as CEO of SurveyMonkey but had been the Director of Marketing Strategy at Capital Records in the early 90s.

I'm not entirely sure when it was sent but according to my notes, it was originally sent in the form of an email, and was released as part of the Sony Pictures hack from 2014.

Anyway, the gist of the memo recommends that back-catalogue becomes the core of the business, as that's where the most streams occur with the new release business being greatly scaled down with a focus on music that will have longevity.

> Music is becoming a purely digital product. A digital-only recorded music company will be a much more profitable one after one-off restructuring costs.

> Catalog needs to be defined much more broadly to include all music that hasn¹t been created in the last 2 years

> With catalog providing the base profits, new releases need to be cut back dramatically to the point where the new business either breaks even or loses a small amount of money (justified by the long term catalog income stream of those songs)

> This will bias new releases to genres like rock and country that typically have had strong catalog. These also happen to be the…

Microsoft rather famously tried this[1]. And it seemed to really help them.

I've worked places that have tried it, too. It does work; in my experience, it literally always improves software quality. But I think it is like how pretty much all diets work, at first, but not over the long term.

It becomes unsustainable, as the pressure to work on features grows.

Continuing with my diet analogy, I now think of it like bulking and cutting phases. When you are bulking up your product with new muscles (features) you are also adding fat (bugs). At some point the percentage starts growing unhealthy, slowing you down and causing all sorts of ancillary problems.

Might be time for a cut phase then.

My analogy breaks down (because it's not really a good analogy) with a bigger team. Then you can have people assigned to bug cleanup. But this leads to its own set of problems — do you pay bug cleanup engineers a bunch extra? Because they will tend to be reading Who's Hiring top to bottom after a few weeks of that.

I think this does work great, though, when it is for a pre-determined fixed duration of time. (e.g. "3 iterations" or "one quarter").

[1]: I think where I read about this is now behind a paywall, but this seems to be the same initiative: https://sriramk.com/memos/zerodef.pdf

There are some Zuckerberg emails exposed as part of some subpoena process where he describes why Unity was a valuable asset to build Meta's AR/VR business. He goes on a lengthy argument about why owning Unity will create a value flywheel that could accelerate Meta's business by doubling down on Unity's engine as a core technology for building games and other AR/VR experiences: https://sriramk.com/memos/zuck-unity.pdf

We don't know what would have been the outcome since this never happened, but he saw Unity as a valuable core technology, so is reasonable to assume (whether you like Zuck or not) that Meta would have probably invested some serious money in making Unity (the engine) better.

Now that we are past that, we are looking at a company that can't grow its game engine business anymore, so they have started to invest in app/game monetization. But likely at the expense of being less focused on improving the game engine.

So the logic here is that Unity under Zuck (who is ironically the king of ad revenue models) would likely have thrived as a game engine. Instead, Unity as an independent company is now seen as nothing else than adware leverage.

Ultimately casting is an ineffable creative skill. Execs find it increasingly harder to trust in the simple skill of artists as the piles of money get bigger. Hence they invest more and more money into 'safe' and more measurable areas like name-recognition, special effects, and marketing. Eventually it ends in disaster though, hundreds of millions of dollars can only go so far to save bad story-telling, and the effort to create a 'guaranteed' blockbuster is revealed as simply putting all your eggs in one basket. There's an excellent memo by Jeffrey Katzenberg about the phenomenon in disney: https://sriramk.com/memos/katzenberg.pdf

I think the effect extends beyond artistic domains as well: how many times have we seen large organizations get burned by 'safely' spending billions of dollars on contractors and getting bad software anyway when they might have simply done their best to hire smart people and then pray for a fraction of the cost.

Alot of executives must believe it's due to piracy.

A lot of people think it's because they're woke. It's not even that - they're just bad movies. I watched Moana a few times and realized they're making fundamental story mistakes. Characters never resolve their conflicts, jokes are prioritized over theme, and important character traits are shown too quickly to the point where you can miss it if you blink.

We really need Disney to slow down and understand that the story comes first with these movies and that good stories take a long time to develop. Frozen took like fifty years to finally make. BatB took four plus numerous failed iterations over decades.

I highly recommend that everyone read the Katzenberg memo[0] from the 90s that was sent out right before Disney went from middling studio to international powerhouse.

[0]https://sriramk.com/memos/katzenberg.pdf

It’s two problems.

1) Don’t hire mediocre people. We knew this new VP was terrible. But the guy being promoted was impatient and wanted someone to take over.

2) Upper management and the board must not forget the reason why the company exists, and put profit ahead of the mission. Otherwise you end up with 1980s GM, or the Boeing 800 Max. Read this speech by Dave Packard, a founder of HP. https://sriramk.com/memos/packard.pdf. A very clear, concise summary of how to run a company, and how to think about your job. And anyone who has experienced corporate America can immediately see that nearly no companies are run this way.