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This is a pretty fascinating perspective to me, one I had never considered. I had always thought of the employee who is paid more than the value they provide as

This is a pretty fascinating perspective to me, one I had never considered. I had always thought of the employee who is paid more than the value they provide as being lazy and a leech. But that’s exactly what the corporation is doing: trying to make a profit by paying for less value than they capture from their employees.

gfxgirl 6y ago
I don't see my employer as paying less than the value they get from me. I see my employer as accepting a risk I'm unwilling to accept. If I go do things on my own I have so many things I have to deal with. Assuming you start a business then insurance, taxes, deductions, payroll (gotta pay yourself from your company) plus I have to market my skills, network, find customers, negotiate contracts, and always worry if I don't I'll go hungry or miss rent. Or, I can just show up at some other company as an employee and in exchange for getting less than the full amount they take care of all of that and all the risk.
- Frost1x 6y ago
  >I see my employer as accepting a risk I'm unwilling to accept. Which is also true. At the same time, risk is highly relative which is why this situation is feasible at all. What's risky for you to do as an individual is not of the same order of magnitude of relative risk when you consider scaling of available resources. Example, Alphabet, Amazon, or Company Y decide to invest $1 million in a new SaaS 'X' effort with some monthly fee in an attempt to build a successful product/service. These companies have arrays of pre-existing successful products/services they've built (typically diversified) that generate stable profits. Relative to that sort of expected profit, SaaS 'X' is a drop in the bucket. If 'X' fails, it's the same absolute monetary loss ($1 million) but the relative risk of losing $1 million isn't significant to any of these businesses, it's small relative to their total resource pool of disposable assets. Loss recovery will also take significantly less time. On the other hand, if I as an individual go through the effort to form an LLC, develop SaaS 'X' myself and fail, $1 million is nothing to scoff at. Even if you're in the higher income scales of our industry and making $300-500k+/yr for labor, you're looking at ~3-4 years or so of potential losses and values that are probably near or a bit more than your total personal assets, at the very least I'd say 10%. If you start an LLC and get a loan or have some investor drop money on you, $1 million is still likely going to be a lot relative to your loan. It's highly likely that if 'X' fails your business will fail. There's high relative risk here (there are some mitigations strategies from your personal assets but it's still significant). You're probably going to face noticeable financial hardship or have to revert back to the labor market due to business small failure rates. Risk is mitigated through scale, snowballed growth, and diversification (amongst other strategies) in our economic system through initial successes that often occur either through true innovation/market creation/penetration and/or sheer luck.

gfxgirl 6y ago

I don't see my employer as paying less than the value they get from me. I see my employer as accepting a risk I'm unwilling to accept. If I go do things on my own I have so many things I have to deal with. Assuming you start a business then insurance, taxes, deductions, payroll (gotta pay yourself from your company) plus I have to market my skills, network, find customers, negotiate contracts, and always worry if I don't I'll go hungry or miss rent. Or, I can just show up at some other company as an employee and in exchange for getting less than the full amount they take care of all of that and all the risk.

Frost1x 6y ago
>I see my employer as accepting a risk I'm unwilling to accept. Which is also true. At the same time, risk is highly relative which is why this situation is feasible at all. What's risky for you to do as an individual is not of the same order of magnitude of relative risk when you consider scaling of available resources. Example, Alphabet, Amazon, or Company Y decide to invest $1 million in a new SaaS 'X' effort with some monthly fee in an attempt to build a successful product/service. These companies have arrays of pre-existing successful products/services they've built (typically diversified) that generate stable profits. Relative to that sort of expected profit, SaaS 'X' is a drop in the bucket. If 'X' fails, it's the same absolute monetary loss ($1 million) but the relative risk of losing $1 million isn't significant to any of these businesses, it's small relative to their total resource pool of disposable assets. Loss recovery will also take significantly less time. On the other hand, if I as an individual go through the effort to form an LLC, develop SaaS 'X' myself and fail, $1 million is nothing to scoff at. Even if you're in the higher income scales of our industry and making $300-500k+/yr for labor, you're looking at ~3-4 years or so of potential losses and values that are probably near or a bit more than your total personal assets, at the very least I'd say 10%. If you start an LLC and get a loan or have some investor drop money on you, $1 million is still likely going to be a lot relative to your loan. It's highly likely that if 'X' fails your business will fail. There's high relative risk here (there are some mitigations strategies from your personal assets but it's still significant). You're probably going to face noticeable financial hardship or have to revert back to the labor market due to business small failure rates. Risk is mitigated through scale, snowballed growth, and diversification (amongst other strategies) in our economic system through initial successes that often occur either through true innovation/market creation/penetration and/or sheer luck.