How to make wealth (2004)
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How to make wealth (2004)
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Re: How to make wealth (2004)
#2I conceive of the value of a company to be the amount of added efficiency it brings to processes undertaken by its customers. If the company and product can either save or give entities time or money, it can theoretically extract some of those efficiency gains in the form of money. I think the "what people want" objective misses the mark a bit, since it implies an a priori desire for the wanted thing in advance of that thing existing. In practice, people just want efficiency and certain products are better at producing that at scale than others.
Re: How to make wealth (2004)
#3Very good essay with lots of wisdom. A couple of nitpicks, only because they keep popping up when I discuss this with people
1. The beginning has an overly technical explanation of wealth in relation to hours worked. Sort of PG's law of conservation of effort. I don't think the relationship is that precise. In all likelihood, what you work on (market opportunity) matters more than the quanta of hours. You can work 16 hours/day every week for two years and have a failed startup while you can have a pretty good success with putting in 10-12 hour days (putting aside efficiency considerations).
2. 'Make something people want' is perhaps not the most helpful way to frame what you should be doing in a startup. I mean it is true at a top level way (surely, nobody would want to work on something nobody wants). However, it seems like an end result of 'x' things that should be done so you get to making what people want.
Re: How to make wealth (2004)
#4I conceive of the value of a company to be the amount of added efficiency it brings to processes undertaken by its customers. If the company and product can either save or give entities time or money, it can theoretically extract some of those efficiency gains in the form of money. I think the "what people want" objective misses the mark a bit, since it implies an a priori desire for the wanted thing in advance of th…
A counterexample would be entertainment, e.g. minecraft.
Re: How to make wealth (2004)
#5Very good essay with lots of wisdom. A couple of nitpicks, only because they keep popping up when I discuss this with people 1. The beginning has an overly technical explanation of wealth in relation to hours worked. Sort of PG's law of conservation of effort. I don't think the relationship is that precise. In all likelihood, what you work on (market opportunity) matters more than the quanta of hours. You can work 16…
Number 2 will not work without ample advertisement. And you also have to think which people do you want to want your product.
Re: How to make wealth (2004)
#6Cool essay, but :
> Many employees would work harder if they could get paid for it.
is just wrong. See http://www.ted.com/talks/dan_pink_on_motivation.html
Re: How to make wealth (2004)
#7Good essay. Though I'd err new developers to not be so easily persuaded by 'the multiplier' effect. In a company your $80K job is a specialist role. One where you focus and get good at one thing. All the million other things are taken care for you, because you weren't recruited for those roles. Just your one.
Working on your own product or in a startup is a comparatively generalist role. Or should I say multiple specialist role as you need to be good at a lot of different things that are outside of, and dare i say sometimes more important than, technology.
Believing that your 'working harder' is making more progress isn't necessarily true. Does that feature you're building excite your customers as it does you? Working for a month at 3x capacity on something that no one wants equates to zero value.
Re: How to make wealth (2004)
#8I conceive of the value of a company to be the amount of added efficiency it brings to processes undertaken by its customers. If the company and product can either save or give entities time or money, it can theoretically extract some of those efficiency gains in the form of money. I think the "what people want" objective misses the mark a bit, since it implies an a priori desire for the wanted thing in advance of th…
A counterexample would be entertainment, e.g. minecraft.
Good point. Minecraft provides a lot of value for me and my family. It is a game we play together, even though we live towns apart. It is also a game that I'm using to teach my girls how to program (on the Rpi). Who knows what my girls will go on and build? Wealth can be created by things we misjudge.
Re: How to make wealth (2004)
#9Good essay. Though I'd err new developers to not be so easily persuaded by 'the multiplier' effect. In a company your $80K job is a specialist role. One where you focus and get good at one thing. All the million other things are taken care for you, because you weren't recruited for those roles. Just your one. Working on your own product or in a startup is a comparatively generalist role. Or should I say multiple spec…
There are two things at play here. One is that not everyone is cut out to be a multi-specialist or a startup founder. Another is that there are lots of people who are, but they don't think they are capable of it.
The only way you can find out if this type of startup life is for you is by trying it. The first type will try and fail, but the second type will succeed if only they try.
Re: How to make wealth (2004)
#10Cool essay, but : > Many employees would work harder if they could get paid for it. is just wrong. See http://www.ted.com/talks/dan_pink_on_motivation.html
No its very true.
Money remains a big motivation factor for those who don't have it.
In general people don't get motivated by what they already have.