Remember those stories from a few decades ago, about how improvements in productivity and automation would mean that we’d only be working 5 hours a week by now? They seem as fanciful, and predictive, as The Jetsons.
It’s almost a punch-line now, because many actually work more hours today than back then. How could they have been so stupid?
Of course there is actually a lot baked into the fact that higher productivity has not reduced hours worked (nor, it turns out, has it raised wages for the bottom 50% of earners in the last three decades, quite contrary to the previous, oh, 200 years). But a big part of why that prediction seems so silly now is it included an implicit assumption: That the work we’d be doing today is pretty much the same as what we did then. You know, before computers.
And I don’t mean, they could not foresee how much time we’d waste on social media. Their primary mistake was not thinking about how we’d use the space created by greater productivity.
Induced demand. People who would not have driven with only two lanes, because of all the traffic, will now drive if there are four lanes. Trips you would not have taken because of the gas cost now become affordable and reasonable.
If your goal was to get more people driving, and maybe get the resulting increase in economic activity, then I suppose you got what you wanted. But if you were trying to reduce traffic - which is why most people say they want more freeways - then you’ve failed. If anything, you made it worse, because now twice the number of people are stuck in traffic. You didn’t reduce the problem, you just spread it around.
Demand is induced in many other areas. I grew up remodeling houses with my dad and got to see the impact of pneumatic nail guns and paint sprayers, which automated a huge chunk of how we’d spent our days. Of course, we didn’t use that newly free time to sit around, we changed our behavior: We did higher quality work, we finished jobs faster so got more done in a year, and we lowered prices.
I ran into this perception conflict all the time as I was building Puppet. I’d say I was building automation for the data center, and salespeople and execs would say, “Oh, so you can fire sysadmins!” I don’t know what they had against operations teams, but no, I would respond: I can give you a choice between reduced cost at the same service level (i.e., you fire people), or keep costs the same but increase service quality.
“Wait, that’s an option?!” Without higher level tools like Puppet, people had no idea how to increase service quality. Cost was their only dial, so they focused on that, even if it made no sense. Once I gave them other choices, of course they wanted better quality.
So where success in 1999 was shipping twice a year, and not going down, like, that often, now success is shipping multiple times a day and never appearing down to your customers. The standards have changed entirely, and that change was made possible mostly through automation. You can bet Netflix doesn’t become the new standard for infrastructure hotness using the bad old manual practices of the 90s.
You might say, no, people’s standards changed and that’s what motivated them to invest in automation, but you would be wrong. They always wanted higher quality. They always wanted better service. They just felt they had no choice but to accept the status quo, until we showed them other options.
I’m not saying automation never destroys jobs, never reduces the amount of work to be done in an area. But it’s by no means the default result.
The first impact of automation is to increase quality. I felt this myself, building houses. The main reason I’m no longer a carpenter is because of how incompetent I was at setting trim nails. You drive the nail most of the way into the wood1, then use a small punch to recess it. You cover that one little hole in spackle, and no one can tell. Unless you’re me. When I do it, I make a little sunflower, with a hole in the middle and holes all around in a circle, because I’m just that good at letting the punch head slide off the nail, into the wood. If we’d had the trim nailers that exist now, even I could have done a decent job. That kind of success might not have driven me out of the industry and into the welcoming arms of computers. I’m not a lot better typist, but the delete key does wonders for my self-confidence.
And let’s be honest about what we’re automating: It’s literally the most boring and least useful work we do. I wasn’t exactly high skilled labor, but I assure you there were more valuable things for me to do than try to set a nail while on my knees, bent over to the base molding. As a SysAdmin, yeah, my bosses thought my job was typing the same command 1000 times a day, but we can look back now and see that definition actually got in the way of the work, rather than being it. We had much more important stuff to do. Or at least, I did. Not sure about the bosses.
If we were all willing to drive cars from the 70s, while living in houses from the 70s (oh god the colors), using computers from the 70s (all three of them), watching channels from the 70s (all three of them), then yeah, maybe we could also work 5 hours a week.
But we all know what we’d do with the spare time: We’d make more work.
You’d do something silly, like write a book. And obviously, most of those books would be junk, but enough would be good that it would become someone’s job. And maybe the other writers didn’t actually have a knack for writing, but found they could be great at helping other writers. Oops, now you’re an editor, or a publisher. And now you’re working more than five hours a week again!
Or maybe you don’t want to be a writer, you just hate Avocado Green enough to do something different with your kitchen. Oops, now your friends want the same thing, and you’re an interior designer.
Or maybe you realize that the gas-guzzling death-traps we all drive in are insane, and you figure out some way to start bringing those sweet little rides over from Japan. You know, just to fill the time. Because you can only consume so much of your day watching three channels (and remember, no ESPN in this scenario).
You’re not the only one that’s bored. Everyone else has more time, and a need to fill it. They can spend the effort to become experts in watches, furniture, bicycles, hiking, boating, economics, philosophy, or any number of other areas. And we all know the main outcomes of expertise, beyond insufferable newsletters: Demand for more specialized stuff, or enough disgust at the lack of it that you’ll just do it your darn self.
Some number of us won’t do the work, but we still want more, because why else would I have read three books on horology? It only takes a few people to step in to fill that demand, and suddenly your time is taken up.
And of course, if you want to buy that fancy Patek Philippe to pass on to your kid, you probably need to work a few more hours than the minimum.
So now you know why we don’t work five hours a week, and hopefully you have a little more confidence that automation will generally be good, not bad. It’ll create more entrepreneurs, raise wages, increase quality, and reduce cost. Not every time, but most times.
It doesn’t explain why those prognosticators in the 70s were so silly, but, well, I bet it wasn’t the worst decision they made that decade.
16oz Estwing finish head with a curved claw, natch. ↩
Managing a high-growth company is the hardest thing I’ve ever done. One big reason is that I only received problems that no one else could figure out. Some were organizational problems that should naturally route to the CEO, but a lot were functional issues that I was no more capable of solving than anyone else.
I eventually discerned a repeated pattern in solving these problems. At first I would just get a few issues. I’d muddle through - do a bit of research, ask for help, and sort things out. As we grew, more and more of my time would be spent on this one kind of problem. I’d become better and better at handling it, and just about the time I’d start feeling like I knew what I was doing, I’d realize, “Oh: There are people out there who specialize in this”. I could just hire someone to do it full time, and they’d be better at it than I ever would. Duh.
I’d then spend three months, or six, or twelve, hiring for the role, and bam, suddenly my time is freed up and I’ve got an actual expert in charge. Well, kind of. At this point I’m a self-taught semi-expert who does not buy into the orthodoxy of the role, and we’ve got a year of my weird solutions, so there’s a lot of friction as we sort out just how to add this new skill set to a growing org. But the point is, my time spent on this problem drops precipitously, and I no longer have much opportunity to put my new-found skills into practice.
Usually just in time for something new to come into focus.
This pattern - gain just enough expertise to hire someone - played out again and again, for me and for other founders I’ve talked to.
In some ways it’s thrilling. You get experience with all of the key areas at the company, and you’re always learning something new.
In other ways, though, it is soul-crushing. Over the eight years I managed Puppet while in fast hiring mode, I rarely got to spend time doing anything I was good at. Humans have a psychological need to feel competent, to feel like they are in control and know what’s going on. I don’t need this all the time, but please, just a little? Sometimes? Nope. Pretty much the second I started to feel like I understood something, I had to hire for it, and my problem changed from doing to managing.
After years of this, I knew just enough about everything to suck at it, but not enough to actually be useful to anyone.
Only as my tenure as CEO came to a close did I begin to see what I uniquely added to the organization. I began being comfortable not delegating certain problems, and felt justified in spending hours on something as an individual contributor, rather than seeking leverage in everything I did.
Only once this happened did I start to feel comfortable as a CEO. I wasn’t just routing problems, I was actually solving some of them. I was not spending 100% of my time in areas I was incompetent; just most of it.
I know the advice as well as you: Great leaders delegate, they empower. If you’re doing the work yourself, you’re not a real leader.
Yes, building and running a team absolutely requires that you empower the team. But that doesn’t mean you don’t get to do anything yourself, that you hand everything off and have nothing left.
Just like everyone else, you, too, need a reason to show up, to stay engaged. You have to hold on to your own why.
If you don’t remember why you, personally, are in the job, then you’ll look up in a few years and realize it’s not there any more. You’ve moved too far from what gets you up in the morning, and suddenly you can’t do it. Or worse, the company has developed but you haven’t. You’re no better at the thing you want to master than you were when you started, because you haven’t been spending time on the problems you care most about.
Some of this is that you need a place of safety. I am a highly fireable person, and raising venture capital made for downright tenuous tenure. The less confident I was about my own strengths, my own value, the less safe I felt. And humans need to feel safe to do great work.
More than that, though, I needed a platform for learning. I was pursuing mastery, but of what, exactly? Of not mastering things?
I know other leaders really are master delegators, hirers, organizers, etc. But that was never going to be me.
I had to peel things back, really understand why I was there, what I cared about, what I wanted to be the best in the world at. And, really, what I was good enough at that I ended up in this place, running this company. Then, as the problems rolled by, I could be sure to push that forward just a little bit, even if my focus was on the organization’s needs, not my own.
The times I lost this sense of why I was there and what I was getting better at were some of my most depressing days. But the days where I could connect what I felt good at, what I spent my time on, and what the company needed from me were the best days.
I don’t think that’s any different for me, or for other founders, than it is for anyone else.
But all the discussions of leadership I hear leave this bit out: You’re a human, too. You have to provide the why for the whole organization, but every individual deserves to be able to translate that into what they do every day. Even you.
My experience growing and fundraising for Puppet was full of inspirational-sounding phrases that cut like a knife. Aggressive goals got praise for wanting to “build a real product” and “really scale this thing.” These are some of my favorites. And when I say “favorites,” what I mean is, I hate them. Deeply.
The one that I heard most often made me want to walk out of the room. I’d pitch an investor while fundraising, and he (always he) would say: “So you’re going to try to turn this into a real company, eh?” As if being my full time job for years was somehow not real. As if you are the arbiter of truth, not my customers. Or me.
If you want to make an entrepreneur feel small, you really want to piss them off, try to inspire them this way. I assume most people who used it thought they were complimenting me, impressed that I was taking this big step or something. But it was a sure fire way to trigger my defenses. When you diminish the work I’ve done so far, it’s hard to see you as a potential partner. I quit my full time job five years ago, and have missed out on hundreds of thousands of dollars of earnings, but asking you for money is what shows I’m serious?
I’m convinced at least some investors did it on purpose, as a form of negging - trying to position themselves as an authority and me as someone who needed their help and wisdom. “That’s pretty cute. Why don’t you get some help from the professionals?” I’m good, thanks.
I know most people didn’t mean it that way, though. Their worldview is just so skewed that if you haven’t raised a ton of money, you’re not really trying. They can only conceive of success if it looks a specific way. You literally cannot succeed unless you do what they do, what all their friends do.
If you’re an investor, advisor, or executive, take a deep look at how you talk to founders. Are you truly complimenting them, or actually diminishing their work? Are you presenting yourself as the arbiter of success, even while you think you’re saying the other person has done so well?
If you’re a founder, know that you don’t have to take it. No one else gets to define success for you. There’s always an in-crowd, but by definition the best results come from being outside of it. Even if you decide you need their money, you don’t have to accept their framing.
I don’t know what the rest of the world thinks when they use the phrase ‘power tool’, but for me it’s visceral, literal. My experiences using them and watching them transform my family’s work permeated my time building Puppet. These power tools aren’t little plugins to expensive frameworks, they’re large capital investments that dramatically change your job.
I grew up building houses with my dad. The worst task he gave me was trying to paint a set of louvre doors for a closet while in high school; I had to flip the doors over every 90 seconds to catch drips getting through the slats. After three days of misery, my father relented and rented a paint sprayer, with which we finished the job the same day, at a much higher quality.
Around the same time, my dad would rent a pneumatic nailer for big framing jobs. By the time I finished college a few years later, that critical tool went from borrowed to owned and traveled everywhere with him. Initially used only for large jobs, most contractors now have multiple nail guns to cover framing, trim, and every other use case, and the air compressor needed to power it is as important as electricity.
It might not be obvious, but both of these are examples of automation. You replaced a very manual process - applying paint, or nailing things together - with a machine. If this were a factory, these days you’d call those machines robots, but because it’s a construction site, we just call them tools.
And these tools were expensive. Even with how much faster we finished that painting job, I expect it cost more to rent the sprayer than to finish the work manually, because of how little he was paying me. (This does ignore the soft costs of listening to me complain, which were likely high.) Even today paint sprayers and nail guns are often rented rather than purchased, because good ones cost a lot of money and aren’t needed all the time.
It’s no surprise that discussions of tools and productivity are easier to understand from my experience as a carpenter than as a sysadmin. There’s plenty of room for arguments about what is or is not a software power tool, but when it costs more than a week’s wages, it trails a bright orange cord everywhere it goes, and it can nail your hand to the wall while you’re standing at the top of a ladder1? It’s a power tool.
There’s a common story about what robots and automation do to people like my dad (and both of my brothers, who followed in his footsteps): It steals their jobs and ruins their lives.
What utter poppycock.
If you think of your job as driving metal spikes into wood, then a nail gun is a mortal threat. But if this is your value add, your biggest danger was never automation. My dad never sold his ability to join raw materials together quickly; he sold homes, he sold the opportunity to enjoy your house and family more. How did these new power tools affect that?
They were awesome. Painting and nailing are classic examples of menial, low-value work, and yet we spent most of our time on them. All of the differentiation we offered to our customers was packed into a narrow slice of work, because implementation took so much time and money. As we were able to bring more powerful tools to bear, the menial work shrank and larger portions of our time could be spent on design work, customer interaction, and tuning our customers’ homes.
Interestingly, my father’s next career step was even more pointedly about experiences enabled by tooling. He took a job with a state hospital in Tennessee, fabricating custom furniture for severely disabled patients. Suddenly he was using industrial sewing machines for upholstery, and partnering with medical professionals to design multiple beds for each patient, enabling them to be happier and more comfortable (and also avoid bed sores, thus saving hundreds of thousands of dollars per patient). Given the tragically minimal budget allocation for this kind of work, every dollar saved through automation and tooling directly delivered health and happiness to his patients.
It’s no wonder I see the value in power tools, that I am more conscious of the benefit they can deliver than the loss of low-value menial work.
I had a similar experience as I was building Puppet. I would meet executives and salespeople (I don’t know why it was always them) who would say, “Oh, automation? Great, you can fire sysadmins!” No. Beyond the obvious reality that I was selling directly to my users, who would never buy on the promise to fire their coworkers, that was just not why we were valuable.
Puppet gave people a choice between lowering cost but keeping the current service quality, or keeping your costs flat while providing a much better service. “Wait, making things better is an option? I didn’t know that!” Most companies were aware that their IT sucked, but they only knew how to measure and manage cost, so that’s what they did. Once you believed in the power to make things better, power tools turned out to be great investments for both the user and the buyer.
By letting people spend more time on the parts of their work they enjoyed, the work that makes them special, we also delivered higher quality experiences for their customers and constituents. “Spend less time firefighting and doing menial work, and more time shipping great software.” If the heart of your skillset is clicking buttons or responding to outages, Puppet might have been a threat to you, but our users knew where their real value was. We helped them spend more time there and less time on the boring, low value stuff. The sysadmins hated the work, the customers hated to need it, and the executives hated paying for it. Great, done, don’t worry about it.
That’s partially why productivity has stagnated2. The world has not changed that much - some of the greatest improvements to productivity come from making large capital investments in tooling for your workers - but how we spend our money has. People balk at a $5k computer, when the Mac IIci would cost more than $13k in today’s dollars just for the hardware, yet was a powerhouse in desktop publishing. This is to say nothing of how the mobile app stores have driven down what people are willing to spend on software.
Yes, Adobe’s software is expensive, but it’s that price because it delivers so much value. If it didn’t, no one would buy it. Every large market should be so lucky as to have the collection of power tools that graphic designers get. It sounds crazy, but we’re suffering from not enough expensive software. Instead of building the most powerful software possible and finding customers who see its value, companies are building the simplest thing they can and trying to get everyone to use it.
There are bright spots in the industry, like Airtable and Superhuman. I’m hoping they help to shift momentum back to automating away the tedious work and enabling focus on what humans excel at.
More powerful tools improve your life, but they also make you happier even if you can’t buy them. They tantalize you, promising you great returns, if only you can come up with the cash. And they’re maybe just a little bit scary, warning you that buying them is not enough. You must master them.
A friend of ours managed to do this when working alone in the time before cell phones. ↩
Yes, I might be being simplistic to make a point. ↩
What Voltaire and the Flaw at the Heart of Economics Have to Teach Us About Software That Doesn’t Exist
Voltaire’s Candide juxtaposes an optimistic philosophy with unbelievable tragedy. He was angry at the 19th century philosophers who proclaimed that we lived in the best of all possible world while destruction and death unfolded around Europe on an epic scale.
We might hear the claim that we live in the best of all possible words and scoff. Of course, we’re too enlightened to be such naïve optimists. But are we? Isn’t the belief tempting? Or even, doesn’t the behavior of those around you make more sense if you realize they believe this, at least a little bit?
Economists are theoretically rational, analytical, big picture thinkers, but at the root of modern economics is a belief shockingly close to Candide’s parody of optimism. They have what they call “The Efficient Market Hypothesis” (EMH), which roughly states that all assets are valued fairly. This is built off the idea that asset values in an open market are fair because they include all available information, and all the actors in that market are behaving rationally in regard to both the asset and the available information.
This theory tends not to trigger the cynicism that Voltaire does. Intuitively, it sounds not just right, but defined as so. Isn’t an open market essentially a mechanism for finding the fair value of an asset? It’s not so simple. And when it goes wrong, it does so spectacularly.
Modern economists cannot be as destructive as the great thinkers of the 18th century, whose big ideas justified eugenics and many other horrors. Just because they cannot as easily be used to justify mass murder does not mean they should not be accountable for the downsides of their obviously incorrect theory.
“No”, I hear you say, “the EMH is not wrong; it’s correct by definition.”
Economists have convinced us of what Voltaire was protecting us from: We live in the best of all possible markets, where all information is public and all assets are fairly valued. If the market does not value something, that it must actually be worthless.
But of course, if that were true Warren Buffet would not have become a billionaire buying stocks that were worth more than the market was paying, the finance industry could not have been built on advising clients about public stocks, and you’d have no need for lemon laws or other regulations that fight information discrepancies. Nor would Kahneman and Tversky have won the Nobel Prize for demonstrating that actors in an economic system behave anything but rationally, puncturing the EMH for good. Thankfully, this has forced the field to begin to grapple with its flawed underpinnings, but many modern beliefs are implicitly built around these bankrupt theories.
You might be patting yourself on the back right now for not being silly enough to draw Voltaire’s ire, but it’s baked into the value system of the world around you, especially if you live in the US.
The market moves from irrationally ignoring new technologies like the blockchain to irrationally dumping money on them, without any fundamental change to justify the shift
We tend to claim that the rich earned their status through hard work, rather than recognizing the role of privilege, inheritance, and luck in their status
Of course, not everyone in the market operates with such optimism, but each of us is biased in this direction. It affects our thinking whether we want it to or not.
“Ok”, you say, “even if I accept some people make optimistic investment decisions, what does that have to do with software?”
Great question. If we live in the best of all possible markets, where all information is public and all assets are fairly valued, then we can trust the market’s assessment of what software should and should not exist. Lack of software to solve a problem is a sign that it’s not worth solving.
If, on the other hand, our world could be better, or if our market is imperfect at valuing assets, then we can’t trust intuitive conclusions about where value resides. This is most true when it comes to valuing unsolved problems. It might be that a given problem has no solutions because it is not worth solving, but mundane reasons are more likely to be at fault.
Most great companies exist because they provided something the market did not know it wanted. Their founders encountered a flaw, and managed to build something great in the opportunity created by it. Henry Ford claimed if he’d have given people what they wanted it would have been a faster horse. The market knew how to value them, but not cars. Before Apple, the market did not value personal computers. Before Google, the market valued directories but not search engines. Before the iPhone, the market valued expensive phones for professional use but not personal.
These value statements were market failures, and their resolution generated billions of dollars for the companies resolving them. Now, of course, the market sees great value in what these founders have created, but not because the market is so smart; it’s because it can no longer fool itself.
It’s easy to grow despondent in the face of such obvious market failures. If the wisdom of the crowds, the great invisible hand of the market, can be so wrong, what hope does a lonely entrepreneur have? I take a different way.
I luxuriate in these misses.
They surround us. We bathe in them. Yes, many great companies have grown into critical market gaps, but even with all these successes, there are untold problems whose solution should be valued but is not.
Only once you reject the market’s flawed opinions about what matters, you begin to see nearly limitless opportunity. There are so many more unmet needs than there are perfect solutions. These are your opportunities.
Of course, just because the market dismisses a space doesn’t mean there’s a great opportunity there. It’s your job to know the problem, your customer, your user, your buyer well enough to draw your own conclusions, to develop enough certainty that you don’t need someone else to tell you what to believe.
Because that’s the real point: Trust yourself, not a bunch of paternalistic optimists.