Adam Smith Builds an App

Transcript of Adam Smith Builds an App

Adam SmithBuilds an App

a discussion by Matthew McCullough of GitHub

The person whose whole life is spent in

performing a few simple operations, of

which the effects are perhaps always the

same, or very nearly the same, has no

occasion to exert his understanding or to

exercise his invention in finding out

expedients for removing difficulties which

never occur.

“

1776

The Economics ofSoftware Development

The Behaviour ofSoftware Developers

Economics

Game Theory Ethics

9Economics

9Game Theory9

Ethics

Economics?

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Attention;

Attention;

I’m not into

I’m not intoeconomics

do you get

do you getpaidfor your work?

You are into

You are intoeconomics

Economics

$100 per hour

Wow!

Pricing

$95 Filet Minon

$45 Roast Duck

$35 Roast Chicken

$25 Ratatouille

$15 Ceasar Salad

$95 Filet Minon

$45 Roast Duck

$35 Roast Chicken

$25 Ratatouille

$15 Ceasar Salad

It is not from the benevolence of the

butcher, the brewer, or the baker that we

expect our dinner, but from their regard to

their own self-interest. We address

ourselves not to their humanity but to their

self-love, and never talk to them of our own

necessities, but of their advantages.

“

—Adam Smith, An Inquiry into the Nature & Causes of the Wealth of Nations

http://www.goodreads.com/work/quotes/19057806

Discovery #1

Discovery #1Don’t price everything at the point at which it would sell well.

Discovery #1

Price some top-shelf items high so as to sell others beneath them.

Don’t price everything at the point at which it would sell well.

What about theoccasional filet minon buyer?

If you decry reality for not

following your model, then

you're no longer practicing

science, you're an economist.

“

—Every scientist that ever looked even sideways at economics

Markets

but then the obvious question to ask is what are

the alternatives and do they work better? You

want to think broadly about that, rethink a lot

of the institutions; but you still have to think

about what are the possible alternatives. If

there are no possible alternative that's better

then I think we are stuck with the not-so-good

alternative we have;

“

—Dr. Russ Roberts, George Mason University with Debra Satz on EconTalk, August 2011 Episode

http://en.wikipedia.org/wiki/George_Mason_University

but then the obvious question to ask is what are

the alternatives and do they work better? You

want to think broadly about that, rethink a lot

of the institutions; but you still have to think

about what are the possible alternatives. If

there are no possible alternative that's better

then I think we are stuck with the not-so-good

alternative we have;

“

build tools...

I also share your value of choice and enabling a

wide range of choices. I do worry about if you

make some choices available to people that are

actually really harmful, you'll wind up in

situations where sometimes people feel more

compelled to make those choices.

“

“

“

Discovery #2

Discovery #2

Don’t criticize in isolation

Discovery #2

Don’t criticize in isolationMake choices based on comparing available options

O S X i s f o r b u i l d i n g

w e b s i t e s , L i n u x i s f o r

running them, Windows is

for testing Internet Explorer.

“

Utility Functions

$200 per hour

Awesome!

wait... hey...

Why are they paying so much?

The figures... are based on the assumptions that

both sides are able to translate all relevant

values into a “common denominator” “utility”.

To act “rationally” according to this criterion

means simply to choose from among the

available courses of action the one which

promises to maximize expected value... over the

long run.

“

—Glenn Snyder Deterrence and Power, 1960

The figures... are based on the assumptions that

both sides are able to translate all relevant

values into a “common denominator” “utility”.

To act “rationally” according to this criterion

means simply to choose from among the

available courses of action the one which

promises to maximize expected value... over the

long run.

“

—Glenn Snyder Deterrence and Power, 1960

Discovery #3

Discovery #3Very few actions are pure currency transactions

Make choices based on weighing both utils and currency

Discovery #4

Discovery #4Some technical decisions are made by stakeholders

Discovery #4Some technical decisions are made by stakeholders

More technical decisions are

made by steak-eaters

Factories

creating happiness

It is naturally to be expected, therefore, that

some one or other of those who are

employed in each particular branch of

labour should soon find out easier and

readier methods of performing their own

particular work wherever the nature of it

admits of such improvement.

“

Discovery #3

Make choices based on weighing both utils and currency

Skill Spikes

It is naturally to be expected, therefore, that

some one or other of those who are

employed in each particular branch of

labour should soon find out easier and

readier methods of performing their own

particular work wherever the nature of it

admits of such improvement.

“

Only hire someone who is

constantly improving their skills

and seems like they would be

great at running the company...

Because they essentially are.

“

—Chris Wanstrath GitHub Tech Talk

Discovery #5

Discovery #5One developer is not ever fully comparable to another

Discovery #5One developer is not ever fully comparable to another

Choose co-workers carefully.

Some actually cost you utils.

Discovery #6

Discovery #6A weekly one hour spike on a technology generates informed hot or not positions

Discovery #6A weekly one hour spike on a technology generates informed hot or not positions

Spikes indicate whether or not to

invest more time.

recruiters...

Hi Matthew, I have a couple of openings in the techcenter for junior java developers with 3 - 5 years ofjava development experience. Do you knowanyone you could recommend? If you refersomeone and we hire them, you are eligible for areferral fee. Thank you in advance! Kind Regards,Kendra'AlvaradoTechnical'RecruiterWCG'[email protected]

From: "Kendra Alvarado" <[email protected]>

Subject: do you know any junior java developersDate: March 2, 2012 12:17:48 PM CST

To: "Matthew McCullough" <[email protected]>