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Never attribute to stupidity what is adequately explained by opportunity cost

erikbern.com

51–60 of 94 posts

Re: Never attribute to stupidity what is adequately explained by opportunity cost

#51
> "People love to conclude that something wasn't done because they are stupid, or possibly lazy.

This happens about 95% of the time when you don't know a certain person/team."

I used to do plant floor support in a manufacturing plant. Over the radio, people treated me like an idiot. When I walked out to the plant floor they treated me like a genius.

Re: Never attribute to stupidity what is adequately explained by opportunity cost

#52
Y'all missing the most important paragraph in the whole article:

> I spent many years working in a satellite office. A lot of the time when I had some deep technical disagreement about something, I'd fly to the main HQ, and go out for dinner with the other team. I wouldn't even talk about technology, just about random stuff. Once they knew me, and realize I was a human (and not a faceless blob), most technical disagreements tended to go away. People are more likely to assume positive intent and not malice/stupidity/laziness.

Building relationships is important important to get bug fixed/features built. Bug prioritization isn't a just a technical nor a business exercise.

Now, I want to hear which company this is that this guy could just "fly to HQ" (I'm assuming Microsoft Back in the Day) but the geographic gaps aren't always that large... :P

Re: Never attribute to stupidity what is adequately explained by opportunity cost

#53

I don't get the use of the terminology here. Opportunity cost is the cost associated by not reaping the benefits of an alternative not being picked. This is a cost from the perspective of the party making the choice. So in this story, 'opportunity cost' is not an explanation why something didn't happen. It is a side effect of something not happening. You could say the real opportunity cost in this story is the startu…

It's a little more complicated, but not much.

The real problem is failing to estimate opportunity costs correctly.

If you need to get Product X out the door and you spend two years rewriting it, you have to failed at basic cost/benefit analysis.

That's simple. More complicated: the user POV can look very different to the PM POV. Which is always a bad thing.

I use a number of DAWs, and on some DAWs the PMs keep adding releasing new versions with new features that are interesting, but non-essential. Meanwhile version x.0 is always broken in important ways, and may be so broken it's literally unusable. And some bugs are just never fixed.

From one POV they need to ship n+1.0 to keep the annual upgrade cycle humming and the income stream ticking over. From another, these companies accumulate a lot of frustration and ill-will, and when a realistic alternative appears not a few users jump ship. So they lose that income anyway.

What's the ideal solution? Other DAW companies ship updates less often. They rely on positive PR, better marketing, and general customer good-will. They seem to be doing okay.

I have no idea how the financials work out, or if they're even comparable between two products that are nominally identical but are used by different demographics.

Even so - the critical point is that someone in the management food chain should at least be attempting to assess these strategic trade-offs.

To an outsider it often looks as if this isn't happening. Instead, the org made a decision a long time ago, the decision has never been updated or challenged, and now the org is just following it robotically whether or not it still makes commercial sense.

Re: Never attribute to stupidity what is adequately explained by opportunity cost

#54
post #43

Earlier quoted context omitted.

I had a kind of... manipulative co-worker who often tried to work around the Product Owner. He'd come into my office and ask, "Can we do ?", hoping to trigger my inner engineer to be interested in how to solve that problem. He finally got tired of me saying, "Given enough time and resources, yes, we can do pretty much anything! Talk to about what we SHOULD do."

And probably the moment you do it, he'd take all the credit from you too.

Well, no, he wasn't that much of a jerk, thankfully.

Re: Never attribute to stupidity what is adequately explained by opportunity cost

#55
post #47

I don't get the use of the terminology here. Opportunity cost is the cost associated by not reaping the benefits of an alternative not being picked. This is a cost from the perspective of the party making the choice. So in this story, 'opportunity cost' is not an explanation why something didn't happen. It is a side effect of something not happening. You could say the real opportunity cost in this story is the startu…

>So in this story, 'opportunity cost' is not an explanation why something didn't happen. It is a side effect of something not happening. >You could say the real opportunity cost in this story is the startup teams having a bunch of unhappy users. The explanation for the missing features is simply: they did something else. The "opportunity cost" _is_ an explanation and your suggestion of shifting the label "opportunity…

> The "opportunity cost" _is_ an explanation and your suggestion of shifting the label "opportunity costs" to apply to something else such as "unhappy users" is just adding to the misinterpretation.

I’m applying the exact definition quoted in the original article.

Re: Never attribute to stupidity what is adequately explained by opportunity cost

#56

I don't get the use of the terminology here. Opportunity cost is the cost associated by not reaping the benefits of an alternative not being picked. This is a cost from the perspective of the party making the choice. So in this story, 'opportunity cost' is not an explanation why something didn't happen. It is a side effect of something not happening. You could say the real opportunity cost in this story is the startu…

Yes, but another way of looking at it is that if you prioritize A over B, it's because the opportunity cost of not doing A would be greater than the opportunity cost of not doing B. So "prioritization" is another way of saying "minimizing opportunity cost".

Sure, but talking about the opportunity cost of the thing you did pick feels backwards to me.

Also, prioritization is not only minimizing cost, you’re probably also maximizing reward. So the calculation is more complicated anyways.

Re: Never attribute to stupidity what is adequately explained by opportunity cost

#57
I learned a lesson about opportunity costs while worked at an IT company. When I started, the company managed the IT for small companies, most being three to five people companies. We had full control of decisions so we kept them up-to-date with the latest best practices. I'm sure there was a bias of the types of companies who went with us as we charged more than competitors.

We started to gain larger clients. We thought that a 5,000 person company would be ahead of the 5 person company when it came to technology. Not so. Here is what we learned: there are political risks for changing technology. A CTO (these are not tech companies) would wait until people were complaining so extremely that people would have to feel that changes were good. It all arose from that bias most people have about change being bad unless it is ten times better.

Re: Never attribute to stupidity what is adequately explained by opportunity cost

#58

This is such an important concept. I was just explaining this to product/leadership the other week: "It's not a matter of convincing me we should do this. Obviously, we should. But we also have a hundred other things that we should do, and a few dozen things that we need to do. So it's not a discussion of 'should we'; it's a discussion of understanding how important this thing is in relation to all of the other thing…

My buddy Tom has said for 30 years "Sure we could do that. But what should we do?"

Re: Never attribute to stupidity what is adequately explained by opportunity cost

#59

Y'all missing the most important paragraph in the whole article: > I spent many years working in a satellite office. A lot of the time when I had some deep technical disagreement about something, I'd fly to the main HQ, and go out for dinner with the other team. I wouldn't even talk about technology, just about random stuff. Once they knew me, and realize I was a human (and not a faceless blob), most technical disagr…

I've always believed telecommuting needs the remote equivalent of the golf course. There are certain human elements that cannot be built over a Zoom call, but do not inherently require a physical presence.

I have never started a company and I was hire #76 at my current place, but if I were to start something remote, I would find a game or hobby appreciated by all the founders and make sure that remained a bedrock of our culture.

Re: Never attribute to stupidity what is adequately explained by opportunity cost

#60

Y'all missing the most important paragraph in the whole article: > I spent many years working in a satellite office. A lot of the time when I had some deep technical disagreement about something, I'd fly to the main HQ, and go out for dinner with the other team. I wouldn't even talk about technology, just about random stuff. Once they knew me, and realize I was a human (and not a faceless blob), most technical disagr…

I've always believed telecommuting needs the remote equivalent of the golf course. There are certain human elements that cannot be built over a Zoom call, but do not inherently require a physical presence. I have never started a company and I was hire #76 at my current place, but if I were to start something remote, I would find a game or hobby appreciated by all the founders and make sure that remained a bedrock of…

This is a huge opportunity. It would serve a great need to create a structured, low-pressure activity for potential business partners to participate in as they socialize over video chat.

Given the potential to democratize socializing to form business partnerships, it would catch on all on its own as a way to be inclusive during the pandemic in a way that golf never was.

Semi-related, I was reading a sociological research paper by Irving Crespi about playing cards in Endicott, NY and in his conclusion, he speculates that people used the structure of playing bridge or what have you in order to more easily tolerate each other's company. He was trying to explain why most card players weren't gambling seriously and I think he was right about structured activities providing a social lubricant analogous to alcohol.

Perhaps the eu-social aid of structured activity is even stronger than alcohol because we're given a detailed script to play out and distract ourselves instead of simply taking the edge off of our ability to waste energy over analyzing the social situation.

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