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The Value of Time

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Re: The Value of Time

#21

Post by SatvikBeri »

jessepollak wrote: post #3

I think that OP raises a good point in this post, but I'm skeptical of whether his strategy is really applicable in the real world. Yes, there are obviously some cases where it may make sense to do the more expensive option in order to save time, but can this strategy really be used as an overarching decision making mechanism? I think not, primarily because of the fluctuations in productivity/necessity of productivit…

I found the opposite feedback loop. Namely, the more I spend money to avoid low-value tasks, the more my average value goes up, which in turn lets me spend more money.

Example: I hired a personal assistant to take care of several tasks for me. I could have done them slightly faster myself, but this saved me a lot of time and mental energy, which I used to work on activities that earn me more money, which let me raise my rates, which let me outsource pricier stuff.

Re: The Value of Time

#22

Post by ricardobeat »

zacharyvoase wrote: post #4

This is the concept of opportunity cost[1], and along with time preference and marginal utility, it is one of the foundations of praxeological thought. Understanding OC changes your entire perspective on the world, makes you realize why rich people don’t recycle as much, why first class flights exist, and why people with higher salaries are more likely to have chauffeurs (so they can not waste time on the act of driv…

> when the economic output they would produce in that time pays for the driver, the car, the fuel, and still leaves profit

Is that really true? From a certain point the economic output is produced regardless of what that guy is doing, he is just setting future directions. Does Tim Cook generate $2.9 million every time he takes a dump? I don't think so.

I have a better explanation: convenience and satisfaction.

Re: The Value of Time

#23

Post by ricardobeat »

I think this is taking the value of time concept way too far. So if an employee spends 15 minutes in the toilet he's pulling down the company's future value? Feeling entitled to favors from others (whose time is 'less valuable') is just a peek into where this line of thought heads.

Anyway, I'm not wasting my time discussing this [$640 blog post].

Re: The Value of Time

#24

Post by ChuckMcM »

Welcome to the next level. Its one of those things like comparative advantage [1] that you need to internalize so that decisions you make take them into account. It goes along with understanding that 'money' when you give out equity for it, costs 10x what it does if you earn it.

[1] http://en.wikipedia.org/wiki/Comparative_advantage

Re: The Value of Time

#25

Post by gfodor »

While most of the comments here are talking about the fact that this is the posters "discovery" of opportunity cost, there's another point to be made here. There are several reasons why, as a startup founder, getting that $660 laptop instead of the $700 one benefits your company other than the $40 that stays in your bank account.

Frugality breeds more frugality: if you set an example, others will follow and compound the financial savings. Frugality can result in camaraderie, since you are all in the rickety boat together eating ramen. Frugality can prevent resentment and walls going up between employees and decision makers, since even the CEO has to cut back on everyday luxuries and lives the same way employees do. Frugality can express your values by giving you an opportunity to "splurge": if you spring for a $500 chair for all the engineers but never fly first class yourself, it shows that you understand how important a good working environment is compared to other things that are perceived to be frivolous. Frugality can serve as a reminder of risk: if you're surrounded by luxuries you can forget you are actually a startup fighting to stay alive. Frugality can maintain a good relationship with investors even when the going gets tough, since it shows you're trying your best to avoid blowing their investment. Frugality can motivate employees and reward them for success, since you'll only add perks when the company can afford them, and when you do, the team made it happen not the VCs. The list goes on.

Re: The Value of Time

#26

Post by jmduke »

gfodor wrote: post #25

While most of the comments here are talking about the fact that this is the posters "discovery" of opportunity cost, there's another point to be made here. There are several reasons why, as a startup founder, getting that $660 laptop instead of the $700 one benefits your company other than the $40 that stays in your bank account. Frugality breeds more frugality: if you set an example, others will follow and compound…

I think this gets into a debate that can't really be settled with rights and wrongs, but:

Frugality for frugality's sake is just as dangerous as extravagance for extravagance's sake. Saving $40 on a laptop is great if and only if you're positive that a more expensive laptop isn't going to make that money back. The danger of excessive frugality is that you start thinking of employees as costs to be trimmed, as opposed to investments who generally pay handsome dividends.

Never underestimate the productivity of an engineer who has everything he needs.

Re: The Value of Time

#28

Post by Radim »

gfodor wrote: post #25

While most of the comments here are talking about the fact that this is the posters "discovery" of opportunity cost, there's another point to be made here. There are several reasons why, as a startup founder, getting that $660 laptop instead of the $700 one benefits your company other than the $40 that stays in your bank account. Frugality breeds more frugality: if you set an example, others will follow and compound…

Slightly off-topic: I had ramen a few times in Japan, and while truly delicious, it's massively expensive and rather exotic. Why is ramen a synonym for "cheap" in the US (apparently)? Or does it mean just "instant noodles" over there?

Re: The Value of Time

#29

Post by lpolovets »

Radim wrote: post #28
gfodor wrote: post #25

While most of the comments here are talking about the fact that this is the posters "discovery" of opportunity cost, there's another point to be made here. There are several reasons why, as a startup founder, getting that $660 laptop instead of the $700 one benefits your company other than the $40 that stays in your bank account. Frugality breeds more frugality: if you set an example, others will follow and compound…

Slightly off-topic: I had ramen a few times in Japan, and while truly delicious, it's massively expensive and rather exotic. Why is ramen a synonym for "cheap" in the US (apparently)? Or does it mean just "instant noodles" over there?

There are ramen restaurants in cities with larger Asian populations like NYC and Los Angeles. To most Americans, however, ramen refers to the $0.50/meal packs of instant noodles.

Re: The Value of Time

#30

Post by acro »

There is more to life than optimizing everything based on cost. That walk from the more distant hotel is healthy for you, and you get to enjoy the scenery. Sometimes it's good to think of time as having monetary value because it gives you perspective, but also sometimes it's good to forget it and actually enjoy life.
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