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This page contains all of the posts and discussion on MemeStreams referencing the following web page: The Innovation Problem. You can find discussions on MemeStreams as you surf the web, even if you aren't a MemeStreams member, using the Threads Bookmarklet.

The Innovation Problem
by Acidus at 2:50 am EST, Dec 28, 2008

A series of Paul Graham's articles has led me to something I'm calling the Innovation Problem. Essentially it started when I read his article After Credentials. I enjoyed it article, but found this part is odd:

Do they let energetic young people get paid market rate for the work they do? The young are the test, because when people aren't rewarded according to performance, they're invariably rewarded according to seniority instead.
...
If people who are young but smart and driven can make more by starting their own companies than by working for existing ones, the existing companies are forced to pay more to keep them.

This statement about motives seemed out of sync with his essay Great Hackers:

Great programmers are sometimes said to be indifferent to money. This isn't quite true. It is true that all they really care about is doing interesting work. But if you make enough money, you get to work on whatever you want, and for that reason hackers are attracted by the idea of making really large amounts of money. But as long as they still have to show up for work every day, they care more about what they do there than how much they get paid for it.

Perhaps this is because Graham is talking about a general case of person in the first essary and a subset of people (Specifically great programmers) in the second.

Now, I don't consider myself a super hacker and nor would I ever compare myself to someone like RTM or others Graham has mentioned. Quite the contrary I've gone out of my way to deny unwarranted comparisons. I do however consider myself a hacker and I understand exactly what Graham means in his 2nd essay.

I think that performance metrics are one half of a two sided coin, depending on what drives you are a person: pay or project.

Let me explain. I work for a Fortune 15 technology corporation. They pay me very, very, very well. However in return I'm subjected to (with a fair bit of good things) unbelievably stupid bullshit. They don't seem to realize that I couldn't give 2 shits about their money otherwise I'd have alot less bullshit in my life.

Jay Chaudhry met with me twice in the spring of 2008 and asked me to join his new start up Zscalar. I turned him down for a couple reasons, the biggest being he kept appealing to the wrong side of me. He kept talking dollars, he never talked projects. How are you doing "in the cloud" security. Are you buying or building? ... [ Read More (0.4k in body) ]


 
RE: The Innovation Problem
by dc0de at 11:48 pm EST, Dec 28, 2008

Acidus wrote:
--snip--
Let me explain. I work for a Fortune 15 technology corporation. They pay me very, very, very well. However in return I'm subjected to (with a fair bit of good things) unbelievably stupid bullshit. They don't seem to realize that I couldn't give 2 shits about their money otherwise I'd have alot less bullshit in my life.

Jay Chaudhry met with me twice in the spring of 2008 and asked me to join his new start up Zscalar. I turned him down for a couple reasons, the biggest being he kept appealing to the wrong side of me. He kept talking dollars, he never talked projects. How are you doing "in the cloud" security. Are you buying or building? Which parts are you buying and which parts are you building. I'm not leaving a role where I get to shape research and product features to babysit a farm of 1U Barracuda boxen. I even flat told him I don't care about money and he looked at me like I was an idiot. And still could not to my satisfaction tell me what I would do.

I go for the project. Yet at both ends of the extreme, from large to small, companies kept appealing to the money side of the "pay/project" coin. From my limited experience the "performance mertic pay" side is taken care of at both extremes of company size and type. Perhaps I'm just really lucky.

However that's not true for the project side of the coin. Smart people go where the innovative products are. And while rewarding performance may be taking hold in large corporations (and I'm certainly proof that it does) innovation is still very much tied to seniority.

So, in my view, the "performance metric problem" is one side of the problem coin. However I believe it is second in importance to the other, far larger and undiscussed side: "The Innovation Problem". The Innovation Problem is this: It is easier for smart people to develop new products or technology in a start up and have a higher degree of success than doing so of inside a large technology corporation.

This is odd considering that the costs of starting a start up are approaching zero. It should cost a corporation hardly anything to incubate new ideas. And indeed I see "incubators" at tech firms all the time. And like startups, most fail. However they fail for far different reasons than traditional startups fail. In-company incubators fail because they starve.

You don't see it unless you have lived in both worlds. At large corporations "innovation" comes from a certain group of people. Phd. Senior Fellow. Technologist. Vint Cerf style. These groups have support structures because they are somehow viewed by the corporation as the "real researchers" even th... [ Read More (0.2k in body) ]


  
RE: The Innovation Problem
by Decius at 12:49 am EST, Dec 29, 2008

dc0de wrote:
I hate to say it, but if you want to work for Large Corp, you get the stable job, with the stable pay, and the stable benefits.

Stable Job? Stable Benefits? Frankly, big companies have been slashing healthcare benefits systemically for years and various big company management fads such as reorganization, outsourcing, and offshoring have completely killed the notion that corporate jobs are stable. My friends who aren't allowed to wear jeans to work still fear layoffs.

I honestly think the big difference between working in small versus large organizations is that the former offers freedom but demands flexibility... to be effective at a startup you have to be a generalist... whereas the later provides a more conformist environment but allows people the space and time to dig deeply into single, highly specialized areas that small companies can't afford to devote entire headcounts to.

I don't think the one should really look down its nose at the other. They are doing different things. Big companies tend to gravitate toward academic research because it suits them - they have money to allow people to devote their lives to developing a deep understanding of narrow technical subjects - the value of which is applied by other people - by teams of people. There is something to be said for digging that deep into a technical matter without having to be concerned with its short term contribution to revenue. But big companies are not good at going after new opportunities, because they have all these specialized people who are organized in a system to mine the old opportunity. It is easier sometimes to build a new system to pursue the new opportunity than it is to try to change the way an entrenched system works.

One of the problems that we have in our economy is that opportunities that are developed by these people who have devoted their lives to the deep exploration of a technical matter are often prevented from being realized by intellectual property laws that tie them to the interests of large companies who are ill suited to pursue them. A legal system that is more devoted to the vigorous defence of property rights than to the promotion of innovation is going to produce more centralized wealth at the expense of technological progress and overall standard of living/overall wealth. The fundamental idealogical fallacy in our society is the idea that maximizing property rights makes people in general more wealthy. In fact, a society can achieve its greatest wealth potential by maximizing innovation, which is a different value than property rights and the two are not always aligned.


   
RE: The Innovation Problem
by dc0de at 10:31 pm EST, Dec 29, 2008

Decius wrote:

dc0de wrote:
I hate to say it, but if you want to work for Large Corp, you get the stable job, with the stable pay, and the stable benefits.

Stable Job? Stable Benefits? Frankly, big companies have been slashing healthcare benefits systemically for years and various big company management fads such as reorganization, outsourcing, and offshoring have completely killed the notion that corporate jobs are stable. My friends who aren't allowed to wear jeans to work still fear layoffs.

I honestly think the big difference between working in small versus large organizations is that the former offers freedom but demands flexibility... to be effective at a startup you have to be a generalist... whereas the later provides a more conformist environment but allows people the space and time to dig deeply into single, highly specialized areas that small companies can't afford to devote entire headcounts to.

I don't think the one should really look down its nose at the other. They are doing different things. Big companies tend to gravitate toward academic research because it suits them - they have money to allow people to devote their lives to developing a deep understanding of narrow technical subjects - the value of which is applied by other people - by teams of people. There is something to be said for digging that deep into a technical matter without having to be concerned with its short term contribution to revenue. But big companies are not good at going after new opportunities, because they have all these specialized people who are organized in a system to mine the old opportunity. It is easier sometimes to build a new system to pursue the new opportunity than it is to try to change the way an entrenched system works.

One of the problems that we have in our economy is that opportunities that are developed by these people who have devoted their lives to the deep exploration of a technical matter are often prevented from being realized by intellectual property laws that tie them to the interests of large companies who are ill suited to pursue them. A legal system that is more devoted to the vigorous defence of property rights than to the promotion of innovation is going to produce more centralized wealth at the expense of technological progress and overall standard of living/overall wealth. The fundamental idealogical fallacy in our society is the idea that maximizing property rights makes people in general more wealthy. In fact, a society can achieve its greatest wealth potential by maximizing innovation, which is a different value than property rights and the two are not always aligned.

I didn't mean to infer that one is "better" than the other, simply that they are both different. I've worked in both, and while you may state that healthcare is eroding, well, having just left a startup for a large company, I saw my healthcare coverage increase by 70%, and my monthly costs for my coverage and my family's coverage drop by 47% ($790/mo to $375/mo). The healthcare for the startup companies have been more seriously affected than those of organizations who have large quantities of employees on the payroll.

I don't have the freedoms of doing "everything", but I also have the ability to live my life outside of work, and not be over used by the company. Having worked in "startup" companies from 1997-2004, and 2005-2008, I've got the experience with both large and small.

They both have their benefits and detriments, however, it's up to you as to which is going to be better for you.


 
RE: The Innovation Problem
by I Love Lamp at 11:47 am EST, Dec 29, 2008

Lets all cry some more about getting paid 100k+ a year and getting to do just about anything we want. Damn, I wish we lived on some hippie commune and practiced the fine art of basket weaving. I have a new start-up that anyone can join. Just sign up at http://www.meatspin.com. Like a record baby right round!


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