4 ms·

There are other kind of businesses where estimation is hard. Producing movies, for example. Even if you cast established actors and limit yourself to low-risk

There are other kind of businesses where estimation is hard. Producing movies, for example. Even if you cast established actors and limit yourself to low-risk sequels of successful franchises, chances of box office bomb are substantial. Book publishing would be even better example; thankfully, writing a book is dirt cheap comparing to developing software or making movies. Pharmaceutic research is absolutely unpredictable — but big pharma companies are usually quite profitable, like software companies (their research/production patterns are similar). New software development is _always_ innovation (because, if your problem is already solved by existing software, it is way cheaper to buy this software instead — as cost of production is close to zero compared to the cost of development). Innovation is _always_ unpredictable. Building the business on innovation is therefore a hard problem.

TheOtherHobbes 10y ago
It's fairly easy to estimate the time needed for a novel or a textbook. The only possible reasons for a holdup in (say) a tech book is if the product is in beta and big changes happen after writing but before publication. Producing a movie isn't rocket science either. But if anything it's more complex than most software projects, because you have to arrange the finance, hire hundreds of people spread across tens of teams, move people and stuff around, design and build things, knock things down, add a lot of stuff in post - which may need custom software - and so on. And that's just the footage. You also have to market and distribute the movie worldwide, work out deals for residuals on various media, and so on. And everyone has to be paid on time, near as, or work stops. Estimating profit is a completely different job, unrelated to keeping the machine running from start to finish. It's barely a footnote. Studios are mostly not bad at it, but they do sometimes get it very wrong. Designing a CRUD website that scales is nowhere close in terms of complexity. But here's an interesting thing: movies only get finished because there's a hierarchy of talent and delegation. The director/producer can hire an expert or a ready-made team to handle part of the project, and delegate that entire element to them. From then on the producer/director needs to do some oversight, but the details (should) "just work." Startups don't work like this. Startups hire everyone on a permanent contract basis, often as individuals, try to build them into teams internally, often on the basis that anyone sub-senior is pretty much interchangeable with everyone else at the same level, and generally delegation doesn't happen in the same way. There's really no reason why teams of programmers couldn't get together, set up service companies, and hire themselves out as consultant solution providers. After a few successes a team should have it made. This doesn't happen. I think that cultural difference is very interesting.
- jwetzel1492 10y ago
  It does happen. My company (Affirma.com) has been doing it profitably for over a decade!

TheOtherHobbes 10y ago

It's fairly easy to estimate the time needed for a novel or a textbook. The only possible reasons for a holdup in (say) a tech book is if the product is in beta and big changes happen after writing but before publication. Producing a movie isn't rocket science either. But if anything it's more complex than most software projects, because you have to arrange the finance, hire hundreds of people spread across tens of teams, move people and stuff around, design and build things, knock things down, add a lot of stuff in post - which may need custom software - and so on. And that's just the footage. You also have to market and distribute the movie worldwide, work out deals for residuals on various media, and so on. And everyone has to be paid on time, near as, or work stops. Estimating profit is a completely different job, unrelated to keeping the machine running from start to finish. It's barely a footnote. Studios are mostly not bad at it, but they do sometimes get it very wrong. Designing a CRUD website that scales is nowhere close in terms of complexity. But here's an interesting thing: movies only get finished because there's a hierarchy of talent and delegation. The director/producer can hire an expert or a ready-made team to handle part of the project, and delegate that entire element to them. From then on the producer/director needs to do some oversight, but the details (should) "just work." Startups don't work like this. Startups hire everyone on a permanent contract basis, often as individuals, try to build them into teams internally, often on the basis that anyone sub-senior is pretty much interchangeable with everyone else at the same level, and generally delegation doesn't happen in the same way. There's really no reason why teams of programmers couldn't get together, set up service companies, and hire themselves out as consultant solution providers. After a few successes a team should have it made. This doesn't happen. I think that cultural difference is very interesting.

jwetzel1492 10y ago
It does happen. My company (Affirma.com) has been doing it profitably for over a decade!