Entertaining anecdote that didn’t make it into the blog post: people sometimes mistook us (juicer.io) for Juicero, you know, the infamous $400 machine that squeezed a juice packet. The day the Juicero news blew up, we got some especially hateful posts on our Facebook page.
> Being employed by someone is by its very definition, an exploitative relationship, even if your job is great. Your employer can only afford to hire you if you make more money than you cost [] so no matter what, you are getting paid less than your true value.
Weird fallacy. If I am paid to dig ditches in Haiti, is my true value different from digging ditches in Monaco?
The amount someone brings in depends on their context: what organisation, what country, what city.
It's a hoot when you hear someone say something like that. I mean, nobody works in a vacuum. The boss used her capital and labor to put in place all the resources that enable you to work, and has to use his capital and labor to maintain a going concern, and deserves to earn something for their labor as well as a return on risked capital which is a risk you as the worker don't take. I'm pretty happy to take a salary and go home at the end of the day without having to worry about losing my entire investment due to the vagaries of business or an employee's bad attitude.
There's the game we play which is often very stupid about triaging the imaginary values between things, then there is the value of an hour of human effort. On the whole these two things have very little to do with each other, but the second is the only one which has any merit. The game needs to exist, but the extent to which people prioritize it over the human side is troublesome. Money makes people do stupid things, think about the world in ridiculous ways. To be specific, money makes people abstract away from any reasonable morals and in this case devalue people based on the random circumstance life put them in the game.
> Weird fallacy. If I am paid to dig ditches in Haiti, is my true value different from digging ditches in Monaco?
Yeah your true value is different in that case. Being at the right place at the right moment represent quite a bit of value actually (even if most of the time you have no control over it).
You clearly see "true value" as some kind of intrinsic value, which has to be kind of universal by that definition, but that's not the true value he was talking about, nor does that true value exist as you said in the last sentence.
The true value he talk about is the actual value you bring by the work you do. The thing is we want profit, thus unless you make all the profit, what you get out of your work isn't the full amount that your actual works represent.
Exorbitantly so when it's obviously nonsense. Imagine I have an apple, and there are two apples out of my reach so I say I'll give you my apple if you climb on my shoulders and get the two apples to give to me.
Imagine the same situation, except you say "Climb on my shoulders and get the two apples and you can keep one".
In both situations, we start with you having 0 apples and me having 1 and we end with you having 1 apple and me having 2. In the first, I employed you and in the second, you employed me.
So which one of us was paid less than the true value?
Right, and by that same logic, the author was just exploited by the buyers of Juicer, who thought they could make more money off his IP than they paid him for it.
There is no such thing as “true value”. Value is only what other people are willing to pay for something. Brad Pitt can make more money squinting into a camera holding a pair of sunglasses for 5 minutes, than a laborer might make in his whole life. But that’s because Brad Pitt makes the sunglass company more money by doing so.
By all means let’s clean up systemic issues that encourage an uneven playing field, but by “being exploited” we’ve increased the size of the pie for (almost) everyone in a way never before seen in history.
> If I am paid to dig ditches in Haiti, is my true value different from digging ditches in Monaco?
Wording aside (true vs. relative vs. real, etc.) there is a point to this concept and I think we all know it instinctively. Perhaps it could be called "global value" vs. "local value".
Your "true" (global) value is digging the most valuable trench you could possibly dig. Whether the trench is in Haiti saving millions from famine, or in Monaco saving priceless casinos from collapsing. Digging a lesser trench simply means you are not achieving your true value but limiting yourself to a lower value that your employer extracts from you.
The best coder in the world could make billions of $ or improve billions of lives with some genius piece of code. But if they choose to dig trenches in Haiti helping 3 people it means much of that true value is lost.
True value was probably the wrong phrasing here. More accurate would be “relative value”; The value you as an employee bring in vs your cost. Employers are arbitraging between these values to generate a profit. Businesses have to make more money than they pay their employees.
This particular phrasing just happened to strike a chord for me. It’s likely Marxism 101 but I’m not well versed on economics.
I wonder if there are common best practices on throttling growth for a lifestyle company or bootstrapped startup? I guess it can be as simple as turning off new registrations for periods of time or only allowing invitations at arbitrary times. Has this worked well for any SaaS businesses? Once you hit your financial goals, it could help forestall burnout, but I suppose there's a lot of risk there too - if there's enough unmet demand, someone could replace you.
1) Turn off any explicit advertising/marketing/drip/promotion systems, even if they’re automated and profitable — they’re hacks that distort your view of the product. Let people sign up, but organic word-of-mouth only.
2) Consider a more relaxed pace of life. Travel widely. The startup world is a microcosm, and if you haven’t personally experienced and understood how people live outside of it for several months or years, it’s easy to overwork yourself and think it’s completely normal. There’s a reason “digital nomad” is a thing — a recurring story is that people try it out on a whim or by chance and then get absolutely hooked.
3) If you still want to invest time, what are you personally interested in building into the product?
I think the traditional “talk to your customers” is great for staying grounded and understanding pain points, but you can get stuck in a local maximum. As an engineer/product person, you have a unique insight into what is technically possible in your space, which new technological capabilities will become relevant as time progresses, and the general direction of the market over longer time spans. This is an opportunity to be a long-term thinker and focus on building features or related products that are specifically targeted at highly technical early adopters, so that by the time the idea becomes mainstream, you’ll have a substantial head-start.
Be a craftsman and use your skill to more deeply address the problem space.
If you’ve hit sustainability, are as lean as most bootstrapped lifestyle companies, and churn is not a major issue in general, I think the risk of being replaced by new contenders is actually a very slow-motion risk — people are not so good at changing their habits. :-)
Adding a significantly high price barrier is enough to arrest growth of most B2C Saas companies. I’m not sure you’d even have a digital nomad life style if you’re running a B2B SaaS, especially if your product is expensive.
`Being employed by someone is by its very definition, an exploitative relationship, even if your job is great. Your employer can only afford to hire you if you make more money than you cost (again, with a few exceptions of course) so no matter what you are getting paid less than your true value.`
`It’s much, much easier to get to the top, or near the top of the wordpress plugin directory than it is google (essentially it’s making sure the description of your plugin has the right keywords, and then you’ll be there essentially instantly).`
>Your employer can only afford to hire you if you make more money than you cost (again, with a few exceptions of course) so no matter what you are getting paid less than your true value.
This seems like a somewhat simplistic way to view a company. The amount you "make" for the company isn't the same thing as your "true value," because that isn't a real concept. The value you are able to provide changes based on context and objectives. It's leverage in the moment, not "value" in some inherent sense. Do you think every employee in the world should be able to just quit their job and suddenly realize the same return without changing their costs at all?
"Being employed by someone is by its very definition, an exploitative relationship ... so no matter what you are getting paid less than your true value" stuck out to me as well. But I think it's wrong. For example, imagine you're incredibly good at something very narrow. At a big company which has important needs that align with your skills, you could be making them enormous amounts of money and getting a solid chunk. Working independently, you can spend far less of your time on your top skill, and you may not be able to find any needs nearly as large as the ones big companies are hiring for.
Another way to think of it is the value you get paid as an employee, should reflect how much the labour market values you. I don't think it's fair to say it's unavoidably exploitative.
For every Ryan (OP) who started their own project and succeeded, there are many more who failed (or gave up too early) and lost money they would have earned if they worked for an employer.
Risk always have a premium, so taking risk (starting your own thing) will have a higher expected payoff; at the cost of more variance (risk).
As somebody thinking of starting a SaaS soon, this was a great and insightful read. The one thing this does confirm for me, is that the best ideas are those that solve problems you already have (or create tools or services you wish you had, etc.) Well done!
Really interesting post, thanks for highlighting all of the inflection points in your journey to sale. Inspired me to think really hard about what pain points I have when I freelance.
[+] [-] amitdangerpatel|6 years ago|reply
[+] [-] pteraspidomorph|6 years ago|reply
[+] [-] tonyarkles|6 years ago|reply
> Juicero wasn’t designed to squeeze juice out of packets of fruit. Juicero was designed to squeeze money out of VCs, and it did a great job of it!
[+] [-] blaisio|6 years ago|reply
[+] [-] robocat|6 years ago|reply
Weird fallacy. If I am paid to dig ditches in Haiti, is my true value different from digging ditches in Monaco?
The amount someone brings in depends on their context: what organisation, what country, what city.
We don’t have a “true value”.
[+] [-] geomark|6 years ago|reply
[+] [-] opportune|6 years ago|reply
[+] [-] colechristensen|6 years ago|reply
[+] [-] TrinaryWorksToo|6 years ago|reply
[+] [-] dwild|6 years ago|reply
Yeah your true value is different in that case. Being at the right place at the right moment represent quite a bit of value actually (even if most of the time you have no control over it).
You clearly see "true value" as some kind of intrinsic value, which has to be kind of universal by that definition, but that's not the true value he was talking about, nor does that true value exist as you said in the last sentence.
The true value he talk about is the actual value you bring by the work you do. The thing is we want profit, thus unless you make all the profit, what you get out of your work isn't the full amount that your actual works represent.
[+] [-] scarejunba|6 years ago|reply
Imagine the same situation, except you say "Climb on my shoulders and get the two apples and you can keep one".
In both situations, we start with you having 0 apples and me having 1 and we end with you having 1 apple and me having 2. In the first, I employed you and in the second, you employed me.
So which one of us was paid less than the true value?
[+] [-] doitLP|6 years ago|reply
There is no such thing as “true value”. Value is only what other people are willing to pay for something. Brad Pitt can make more money squinting into a camera holding a pair of sunglasses for 5 minutes, than a laborer might make in his whole life. But that’s because Brad Pitt makes the sunglass company more money by doing so.
By all means let’s clean up systemic issues that encourage an uneven playing field, but by “being exploited” we’ve increased the size of the pie for (almost) everyone in a way never before seen in history.
[+] [-] close04|6 years ago|reply
Wording aside (true vs. relative vs. real, etc.) there is a point to this concept and I think we all know it instinctively. Perhaps it could be called "global value" vs. "local value".
Your "true" (global) value is digging the most valuable trench you could possibly dig. Whether the trench is in Haiti saving millions from famine, or in Monaco saving priceless casinos from collapsing. Digging a lesser trench simply means you are not achieving your true value but limiting yourself to a lower value that your employer extracts from you.
The best coder in the world could make billions of $ or improve billions of lives with some genius piece of code. But if they choose to dig trenches in Haiti helping 3 people it means much of that true value is lost.
[+] [-] goddamnyouryan|6 years ago|reply
This particular phrasing just happened to strike a chord for me. It’s likely Marxism 101 but I’m not well versed on economics.
[+] [-] Zooper|6 years ago|reply
[+] [-] dgzl|6 years ago|reply
[+] [-] tunesmith|6 years ago|reply
[+] [-] trevyn|6 years ago|reply
2) Consider a more relaxed pace of life. Travel widely. The startup world is a microcosm, and if you haven’t personally experienced and understood how people live outside of it for several months or years, it’s easy to overwork yourself and think it’s completely normal. There’s a reason “digital nomad” is a thing — a recurring story is that people try it out on a whim or by chance and then get absolutely hooked.
3) If you still want to invest time, what are you personally interested in building into the product?
I think the traditional “talk to your customers” is great for staying grounded and understanding pain points, but you can get stuck in a local maximum. As an engineer/product person, you have a unique insight into what is technically possible in your space, which new technological capabilities will become relevant as time progresses, and the general direction of the market over longer time spans. This is an opportunity to be a long-term thinker and focus on building features or related products that are specifically targeted at highly technical early adopters, so that by the time the idea becomes mainstream, you’ll have a substantial head-start.
Be a craftsman and use your skill to more deeply address the problem space.
If you’ve hit sustainability, are as lean as most bootstrapped lifestyle companies, and churn is not a major issue in general, I think the risk of being replaced by new contenders is actually a very slow-motion risk — people are not so good at changing their habits. :-)
[+] [-] inapis|6 years ago|reply
[+] [-] leetrout|6 years ago|reply
It sounds like it was easily over $1m but was it 2-4? 5-10? Very curious.
[+] [-] dabeeeenster|6 years ago|reply
[+] [-] glofish|6 years ago|reply
We do live in wondrous times when this doable for many more people that previously was possible.
[+] [-] natrik|6 years ago|reply
Important takeaways for me -
`Being employed by someone is by its very definition, an exploitative relationship, even if your job is great. Your employer can only afford to hire you if you make more money than you cost (again, with a few exceptions of course) so no matter what you are getting paid less than your true value.`
`It’s much, much easier to get to the top, or near the top of the wordpress plugin directory than it is google (essentially it’s making sure the description of your plugin has the right keywords, and then you’ll be there essentially instantly).`
[+] [-] Benjammer|6 years ago|reply
This seems like a somewhat simplistic way to view a company. The amount you "make" for the company isn't the same thing as your "true value," because that isn't a real concept. The value you are able to provide changes based on context and objectives. It's leverage in the moment, not "value" in some inherent sense. Do you think every employee in the world should be able to just quit their job and suddenly realize the same return without changing their costs at all?
[+] [-] jefftk|6 years ago|reply
[+] [-] dannyw|6 years ago|reply
For every Ryan (OP) who started their own project and succeeded, there are many more who failed (or gave up too early) and lost money they would have earned if they worked for an employer.
Risk always have a premium, so taking risk (starting your own thing) will have a higher expected payoff; at the cost of more variance (risk).
[+] [-] Thorentis|6 years ago|reply
[+] [-] tomlagier|6 years ago|reply
[+] [-] Yuioup|6 years ago|reply
[+] [-] nkrisc|6 years ago|reply
[+] [-] majortennis|6 years ago|reply