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>So in this story, 'opportunity cost' is not an explanation why something didn't happen. It is a side effect of something not happening. >You could say the rea

by jasode 6y ago

>So in this story, 'opportunity cost' is not an explanation why something didn't happen. It is a side effect of something not happening. >You could say the real opportunity cost in this story is the startup teams having a bunch of unhappy users. The explanation for the missing features is simply: they did something else. The "opportunity cost" _is_ an explanation and your suggestion of shifting the label "opportunity costs" to apply to something else such as "unhappy users" is just adding to the misinterpretation. Let me try to bridge the gap between what the author wrote and your critique of it... Think of "explanations" as different levels: - level 1: Why is feature X missing? Because they did something else. - level 2: Why did they do something else? Because of opportunity costs. - level 3: Why are there opportunity costs? Because no company has infinite budgets, infinite programmers, and infinite time, and therefore, they must choose what _not_ to work on. - level 4: Why does the company not have infinite <anything>? Because that's what economists, philosophers, theoretical physicists, etc have observed in the visible universe so far and that's the framework of reality we're stuck with for the _practical_ purposes of running a company on Earth. The level 1 cause & effect is "correct" and "true" but also trivial, obvious, and uninteresting. The level 2 cause & effect is what the author is trying to explain. The levels 3 and 4 start getting into metaphysical discussion which might be intellectually entertaining but hard to apply to real life.

sfvisser 6y ago
> The "opportunity cost" _is_ an explanation and your suggestion of shifting the label "opportunity costs" to apply to something else such as "unhappy users" is just adding to the misinterpretation. I’m applying the exact definition quoted in the original article.
JoshuaDavid 6y ago
I think the level 1 explanation isn't entirely trivial, actually. There are several level 1 hypotheses one might have at that point. "Why is feature X missing?" 1. They decided to do something else, and by extension, not this (e.g. because of opportunity costs) 2. They decided not to do anything (e.g. because the product is abandoned) 3. They evaluated the possibility of adding feature X, and decided it doesn't make sense now, even if the resources to implement it were available (similar to the above 2 but it means feature X is unlikely to get implemented without some external thing happening to make it make more sense) 4. They evaluated the possibility of adding feature X, and decided it doesn't make sense ever (e.g. because it directly cannibalizes their primary business model) If you would like feature X as a customer or potential customer, you may care which of those is actually the case. If you are responsible for a large chunk of their revenue, and feature X is make-or-break for you, 1 and 3 are ok scenarios for you, but in scenarios 2 and 4 you're unlikely to have much luck. If you are evaluating whether or not to start using this product, scenario 2 may be alarming enough to make you choose another product entirely, and scenario 4 tells you important things about their business model. The article is suggesting that people overestimate the probability of explanations 2, 3, and 4, and that most of the time explanation 1 is the real one, especially for obvious shortcomings in a product. By the author's evaluation, explanation 1 is "opportunity cost", explanations 3 and 4 are "strategic reason", and explanation 2 isn't really covered (though it could fall under "opportunity cost" if you stretch).

by jasode 6y ago

sfvisser 6y ago

> The "opportunity cost" _is_ an explanation and your suggestion of shifting the label "opportunity costs" to apply to something else such as "unhappy users" is just adding to the misinterpretation. I’m applying the exact definition quoted in the original article.

JoshuaDavid 6y ago

I think the level 1 explanation isn't entirely trivial, actually. There are several level 1 hypotheses one might have at that point. "Why is feature X missing?" 1. They decided to do something else, and by extension, not this (e.g. because of opportunity costs) 2. They decided not to do anything (e.g. because the product is abandoned) 3. They evaluated the possibility of adding feature X, and decided it doesn't make sense now, even if the resources to implement it were available (similar to the above 2 but it means feature X is unlikely to get implemented without some external thing happening to make it make more sense) 4. They evaluated the possibility of adding feature X, and decided it doesn't make sense ever (e.g. because it directly cannibalizes their primary business model) If you would like feature X as a customer or potential customer, you may care which of those is actually the case. If you are responsible for a large chunk of their revenue, and feature X is make-or-break for you, 1 and 3 are ok scenarios for you, but in scenarios 2 and 4 you're unlikely to have much luck. If you are evaluating whether or not to start using this product, scenario 2 may be alarming enough to make you choose another product entirely, and scenario 4 tells you important things about their business model. The article is suggesting that people overestimate the probability of explanations 2, 3, and 4, and that most of the time explanation 1 is the real one, especially for obvious shortcomings in a product. By the author's evaluation, explanation 1 is "opportunity cost", explanations 3 and 4 are "strategic reason", and explanation 2 isn't really covered (though it could fall under "opportunity cost" if you stretch).