I love Paul's essays, but he's way off-base in his latest analysis of Yahoo's rise and fall. I've no bone to pick with the historical section, but his conclusion that "in the software business, you can't afford not to have a hacker-centric culture" can be contradicted with a single word. Apple.
Apple is an amazing company, but Steve Jobs is the anti-hacker. Most of the values we love like openness and configurability fly in the face of his obsession with a transcendental experience for ordinary users. Third-party developers are a necessary evil, to be kept tightly constrained lest they screw up that experience. Internally they have some of the most amazing developers I've ever met, the standard is astonishing, but the designers are in complete control. Hackers love to experiment in public. Apple is obsessed with putting on a seamlessly well-rehearsed performance, so failures have to happen in private or there's hell to pay.
I could go on and on listing Apple's sometimes rocky relationship with its open-source projects or its willingness to compete with its own third-party developers, but the bottom line is that Steve has built a culture where hacker values are marginalized but he still manages to both produce amazing products and make massive amounts of money. He does so by obsessing about the user experience above all else, and he'd have no qualms about out-sourcing the code development to China just like the manufacturing, if he could get the same quality of output. He doesn't have any more affection for programmers than for anyone else involved in the product and sees designers as a lot more central to the process.
The sad thing is that I'd love a 'hacker-centric culture' to be an essential requirement for large software companies. I lost far too much time at SciFoo when I discovered the Inventables stand in the Googleplex, and I'd be in heaven if all corporations catered to my obsessions like that. I just can't justify that argument with the evidence, and on the basis of this essay, neither can Paul.