Yet Another Stupid idea About Business, Episode X1

No Comments

That's an everlasting topic and this won't be the last of my posts on that topic, because I'll probably never figure out how to earn huge quantities of money without delivering crap or ripping off my clients in some other way. That limitation might be even called "Philosophy Induced Economic Handicap". After all, look how prosperously the kings, government top branch and drug lords live. Bill Gates with his Windows is not known for delivering reliable products that honor end user privacy. The Facebook just abuses people's psychology. The Google with its advertisement business spies and tracks people to the point that the NSA finds Google to be a fine target for vacuuming data about people. And I'm the idiot, who thinks that people should get products that might be difficult to use, not user-friendly, but that actually do the job in stead of being just "pain killers". All of that while preserving user's privacy.

So, I'll probably never be materialistically rich. (Yes, I know that from English literary point of view sections that consist of less than 3 sentences are stylistically not acceptable, but may be some style rules and grammar rules, punctuation rules just do not cover all the aspects of expression :-/

However, I do have some observations. (The fact that formal texts should not be written from first person perspective, is one of them, but not the main one.) Namely, it does seem consistent to me to say, at least for now (2016_09_06), that business is only good for replication and nonprofit activity is only good for R&D. Yes, business can try to develop something like the Google has done, but actually majority of the R&D that the Google uses at its products has been done outside of Google, at universities with money that has been dumped there in the form of grants, Linus Torvalds & Fans at their home desk, Richard Stallman & Fans at GCC project, etc. The same goes for nonprofits: they can try to replicate things like feeding and housing the poor, offering care services for some misfortunate, but ultimately they fail to do that.

Historical examples might be the Soviet scientific advancements at robotics, space technology. The science, the R&D, outperformed the United States, but due to lack of replication the scientific results were not distributed to the masses, leading to an economic collapse of the Soviet Union. The 2016 USA seems to lack replication capabilities at the its educational system. The scientific papers, knowledge, is widely available on the internet, for free for everybody, before that, libraries worked just fine, yet the United States educational system fails to do the replication that it takes to consult people to use the available resources.

The thing about the replication is that there is no inherent need for technical quality. If one factory produces a crappier product that is much cheaper than the products of its competitors and the psychology of the people, who choose between the 2 products, does not allow the price-normalized benefits of the technically higher quality, but still affordable, product to outweigh the price-normalized benefits of the crappier product, then the crap producer has sales and the producer of the affordable, but more expensive and technically higher quality product looses. An example of that might be the footwear industry. The shelves with proper leather shoes at shops shrink and shelves with much cheaper, but even visibly low quality, shoes extend.

As of 2016 I do not know yet, what a business wise successful consultancy job looks like, because I've never been business wise successful in my whole 35-year life, but I suspect that may be its like selling coffee: there's a set of ingredients to choose from and the clients just chooses a combination of them or tells the wishes about taste and the consultant chooses the closest combination for the client. In the case of consultancy, freelance software development included, the ingredients are the skills of the consultant combined with tools that the consultant has created for himself to best make use of the skills. May be in the case of surgeons the tools might be some experimental devices that the surgeon has self developed, most likely with the help of other people, other consultants. For example, the Arnold Seppo was a surgeon, who worked in Tallinn, Estonia, but he was known over the whole Soviet Union for good results that he obtained by using his own devices, which were developed with the help of the academic staff from the Tallinn University of Technology.

At the time of the writing of this blog post (2016_09_06) I believe the following 2 videos bo be pertinent to the this blog post:

Scott Adams and Stefan Molyneux about "Why Donald Trump Is Winning - Or Is He?", except that the talk hardly covers the Donald Trump at all.

Rory Sutherland: Life Lessons from an ad man.

As You might have already guessed, this blog post has been written out of personal frustration. A person, who lives near a freshwater lake and has flooding problems does not have to work on a problem, how to desalinate seawater to get freshwater. A person, who lives at a dry desert that is either above the water level of all dams or at an area, where there are no dams present, does not need to spend time figuring out, how to build water barricades to assure its physical safety. I guess that a wealthy person would not write that kind of a blog post that You just completed reading.

Thank You for reading :-)

+++++++++++++++++++++++++++++

I'll modify/update that blog post at some later date at will.

+++++++++++++++++++++++++++++

Update on 2016_09_13

Thanks to linux.com RSS-feed at my RSS-feed reader I stumbled on a rather interestingly written article titled: "How to Make Money from Open Source Platforms" (archival copy). The part 2 of the article is titled "How to Make Money from Open Source Platforms, Part 2: Open Core vs. Hybrid Business Models"(archival copy). The 2016_09_13 version of me might be too stupid to fully understand the article(s), but on 2016_09_13 it seems to me that the closed source model only works in situations, where the client knows, how to use the product, for example, games, e-mail clients, web browsers, but for anything more complex the situation is similar to a situation, where the best herbs that form a cure might grow freely at the client's back yard and it takes a skilled pharmacist to teach the client how to use them. A cure is a cure and therefore it is OK to charge a fortune for the consultancy work, even if the ingredients for the cure are freely available to anybody. At least that's my 2016_09_13 take on the monetization of open source software.

One of my observations is that the consultancy work of pharmacists does not scale, but software license sales, hosting services, can be automated and the automation makes those services scalable. The same with hardware production: anything that can be 100% automated, is scalable. On the other hand, drug manufacturing is scalable and the "big pharma" has demonstrated time and time again that the authenticity of the manufacturer is such a barrier that even well informed client candidates are willing to buy the goods from the authentic manufacturer despite the fact that the knock-offs have the same technical quality and exactly the same manufacturing equipment. In my case that will probably allow me to have a scalable business of selling pre-installed servers. Given the truly bad reputation of mega-corporations(archival copy), where they spy on their clients, etc. the most well funded competitors are capable of serving only those client candidates, who are left without my services due to the fact that I'm either not scaled high enough to serve them or the client candidates reside at an environment, where it is impossible for me to offer my services with a cost that is acceptable to me. Due to the lack of authenticity, the lack of respect of end user privacy, the Microsoft's, Skypes and alike will never be able to replicate my products even if they download the software from my home page and buy the hardware from the very same vendors that I buy it from. Add to that their absolute failure at development, where their business process guarantees that their products will be shipped-for-deadline-and-money-and-enduser-initial-happyness in stead of completing a product and shipping it only, when it is ready even, if the delay costs end-user-happyness and some deals, and I have a barrier protecting my business that they are never able to overcome. Accompany that with some personal history of mine(archival copy), and I'm even better off, despite the fact that I never intended to monetize my personal traits, properties of my persona.

Comments are closed for this post