All these Brilliant People at Facebook Make Me Sad

Let's say you have a technology product that does something pretty trivial, but has non-zero value. Let's say you do something that's worth about 30c per day of utility to each user. If you give this value to 10 million users, you're creating about $3 million of value every day --- or $1 billion of value a year.

That value doesn't seem nearly as real as the equivalent value deployed to a smaller group of people. But that's just because 10 million people is impossible to visualise. The value is still totally real though, despite your lack of intuition for it.

If you believe Facebook delivers little total value, then you must believe its value to individual users is almost totally nil, simply because of the enormous number of people who use the service daily.

Even if you don't like Facebook much, can you really argue that it's delivering _nothing_ to its average user? It's not delivering _any_ value to them at all?

Facebook has 500 million users, and 250 million daily unique logins. If logging on to Facebook delivers even a single cent of value, the total value delivered by each Facebook engineer is already going to be staggering.

1c is an enormous underestimate of what people actually get from the service, but let's run with this. At 1c per login, it's delivering $25 million per day. It has 2000 employees, so each employee is delivering an average of $12.5k per day. I'd actually put the value-per-login at over $1, which would take the average contribution to over $1 million per day.

People would be wise to think carefully before questioning the way markets are allocating capital and drawing in talent. There are certainly cases where the capital allocation is inefficient, but there are also cases where your mental heuristics give you blind-spots.

Lawyers: Do I really need to explain that they perform an important, valuable role?

Drug dealers: Can't say much here. Drugs are tricky, economists call them inelastic, and they can make people irrational.

Bankers: I sure like being able to invest my money and use it everywhere via EFTPOS

Accountants: It's a hell of a drag doing taxes. It's very valuable to have someone do this work for you (if it wasn't, everyone would do their own accounting).

Bottom line: determining value is a tricky economic/algorithmic question.

Luckily, we have a price system, where people can set prices. If the customers pay that price, that's a strong indicator that the service is worth that much. It's not perfect (see bubbles), but it works pretty well on average.

Part of this I bet is thanks to Facebook, as in the latest days there was a massive campaign to go voting, ran collectively by all the people that think this vote is important, on Facebook. For us "internet geeks" Facebook may be not so cool, but the reality is that he is making the average person, a "connected person".

This is huge... and deserves the best minds in the world.

http://en.wikipedia.org/wiki/Community_Memory

But computers and their associated tech like telecom were so expensive in 1973 that Community Memory was impractical at scale. There was no Facebook around to offer Lee Felsenstein an enormous salary and a potential IPO. The infrastructure wasn't yet built out, the audience wasn't yet there, and investor consciousness had not yet been raised. It took another twenty years of development to get from that point to the Web, and then another decade or so to get to Facebook.

Biotech is still stuck in the equivalent of 1973. We've identified many of the processes that need to become cheaper and more ubiquitous in order to conduct biotech research in your basement, but the tools are still large, expensive, and tedious to use. So at this point if you go into biotech you'll either spend 12 hours a day pipetting liquids by hand, waiting for the PCR machine, and pasting your data into Excel for analysis, or you'll spend 12 hours a day raising money to pay for the pipettes, the PCR machine, and the other scientists who are running them.

I've spent years as a biotech postdoc, and I've spent years as a programmer, and it's no mystery to me why people would rather be programmers, and would rather hire programmers. The day-to-day work is more pleasant, and the results have got such evident and immediate value that you can get good pay for them with relatively little effort or risk. Plus, you're part of a really big and freewheeling global culture, not only of web users but of web programmers.