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Did Mark Zuckerberg make Facebook all by himself?

by ihm 6y ago

imgabe 6y ago
Nobody ever claimed he did. His net worth is, at the moment, ~11.6% of the total market cap of Facebook. Do you think the other people who helped create Facebook worked for free? Do you think a neurosurgeon does a surgery all by himself?
- aspenmayer 6y ago
  A better question is, did the other people who helped create Facebook receive total compensation anywhere close to proportional to the value they created for Facebook? Not a rhetorical question. I’m curious what the estimated value to Facebook a high level employee is, relative to the compensation they receive. Then compare that ratio to Zuckerberg’s ratio.
  - fastball 6y ago
    > A better question is, did the other people who helped create Facebook receive total compensation anywhere close to proportional to the value they created for Facebook I don't think that is possible to measure, and even if it was I don't think it is reasonable to say that is then deserved. People that work at FB feel they are fairly compensated, otherwise they can go work somewhere else. It doesn't matter how much value you add to a thing if the thing you are adding value to is owned by someone else. If you hire a contractor to fix up your house, and pay him $30k, and these improvements end up increasing the value of your home by $60k, are you going to call up the contractor and say "hey, the value of my home increased more by your work than I thought it would, here is an extra $30k"? I doubt it. And that is in a hypothetical situation where you know precisely how much value was added by that one individual. But as I said above, that is pretty much impossible to do anyway.
    - aspenmayer 6y ago
      It’s possible to measure. Perhaps not to an extremely high confidence value, but it’s absurd to say an upper and lower bound of these ratios could not be determined. Just call Lloyd’s of London if you don’t believe me. If it can be insured, it can be analyzed sufficiently so these numbers exist and have some errors bars on them. So now we know just now underpaid/overpaid Zuckerberg and our high level employee are. For a thought exercise, what do you think the employees would do with this information? HR departments? Boards of Directors? CEOs? Angel investors? Wealth management advisors? Loan risk quants? Four star generals? Party and national leaders? Some of these may not care if they knew, or would be too busy to care. I think others already have an understanding of these kinds of numbers and relations due to specific domain knowledge or demographic knowledge; aptitudes which make one suited for a given job may also make one especially clever or capable. In any case, the effect of this knowledge varies. I didn’t say that ratio had anything to do with fairness or equality. I think that was something you assumed or imputed into my statement. Insurance companies in many jurisdictions are regulated to prevent excess profits. That’s why car insurance companies are sending refund checks; they’re legally obligated to pass on the savings if it costs them less to provide insurance to you. Why is it absurd then to ask for pay commensurate with profits? They call them points in Hollywood movie contracts[1]; they may have other names in other fields. Perhaps companies over a certain value should be required by law or charter to give employees a choice to receive their regular pay as: 1) x% of value generation relative to other employees in the company as assessed by the people in the company and outside data; 2) y% of value generation relative to any other measure, such as company stock or inflation; 3) z, their inflation adjusted prior pay period payment; or 4) the same payment as they received last pay period; whichever is greater, or whichever the employee chooses. Would that be fair to the company? Why or why not? Would that be fair to workers? Seems hard to say how it would be unfair, unless you are a low value, replaceable worker. Is it ideal? Is it even workable? Would employees like having choice and knowledge better than the alternative? Would they like it better than the current status quo? In the interest of market transparency and maximal agency of market actors, which side is the hand of the market on? Some of these questions can be analyzed by looking at worker-owned co-ops and companies. [1] http://www.hollywoodlexicon.com/points.html http://www.hollywoodlexicon.com/points.html
      - deleted 6y ago
  - imgabe 6y ago
    In a market economy you don't pay for things in proportion to the value they create, you pay based on the supply and the demand. An EpiPen might save your life, should you pay for it in proportion to the value it creates for you? Or maybe you can pay based on the availability.
    - aspenmayer 6y ago
      If it saves your live, it should be regulated, or the costs otherwise removed or hidden or not placed upon the consumer or end-user. How you do this is important but not to the context of this question. It’s a matter of humanity and morality as much as profits and benefits.
    - rmrfstar 6y ago
      > you pay based on the supply and the demand Your argument takes the form "the market price is the right price," which is basically just a statement of ideology. Supply/demand schedules are as much a product of market structure as they are a function of market participant preferences. You see the HFT folks--who probably agree with your ideology--make this argument any time anyone proposes changes to financial market micro-structure. So, the statement "the market price is the right price" implicitly assumes that the current structure of the market optimizes whatever objective you think markets exist to optimize.
      - imgabe 6y ago
        If you think the market is giving a wrong price or structural issues are not optimizing the right thing, the correct action is to fix those structural issues, not to try and fix prices by fiat. The market will continue to operate around that and distort elsewhere, usually to the detriment of everyone involved. It is not an ideology, it is a fact of how markets operate. If something is in great supply and low demand, the price will be low, and vice versa. This is an observable, objective statement about the nature of the world. Having an ideology that makes you wish the price were something else, doesn't change the reality of how prices of things are determined. The "structural issues" are usually the result of artificial distortions on the supply or the demand that come from the result of well-meaning but misguided efforts to get the "right" price according to one side of the transaction.

Did Mark Zuckerberg make Facebook all by himself?

by ihm 6y ago

Did Mark Zuckerberg make Facebook all by himself?

Nobody ever claimed he did. His net worth is, at the moment, ~11.6% of the total market cap of Facebook. Do you think the other people who helped create Facebook worked for free? Do you think a neurosurgeon does a surgery all by himself?

aspenmayer 6y ago
A better question is, did the other people who helped create Facebook receive total compensation anywhere close to proportional to the value they created for Facebook? Not a rhetorical question. I’m curious what the estimated value to Facebook a high level employee is, relative to the compensation they receive. Then compare that ratio to Zuckerberg’s ratio.
- fastball 6y ago
  > A better question is, did the other people who helped create Facebook receive total compensation anywhere close to proportional to the value they created for Facebook I don't think that is possible to measure, and even if it was I don't think it is reasonable to say that is then deserved. People that work at FB feel they are fairly compensated, otherwise they can go work somewhere else. It doesn't matter how much value you add to a thing if the thing you are adding value to is owned by someone else. If you hire a contractor to fix up your house, and pay him $30k, and these improvements end up increasing the value of your home by $60k, are you going to call up the contractor and say "hey, the value of my home increased more by your work than I thought it would, here is an extra $30k"? I doubt it. And that is in a hypothetical situation where you know precisely how much value was added by that one individual. But as I said above, that is pretty much impossible to do anyway.
  - aspenmayer 6y ago
    It’s possible to measure. Perhaps not to an extremely high confidence value, but it’s absurd to say an upper and lower bound of these ratios could not be determined. Just call Lloyd’s of London if you don’t believe me. If it can be insured, it can be analyzed sufficiently so these numbers exist and have some errors bars on them. So now we know just now underpaid/overpaid Zuckerberg and our high level employee are. For a thought exercise, what do you think the employees would do with this information? HR departments? Boards of Directors? CEOs? Angel investors? Wealth management advisors? Loan risk quants? Four star generals? Party and national leaders? Some of these may not care if they knew, or would be too busy to care. I think others already have an understanding of these kinds of numbers and relations due to specific domain knowledge or demographic knowledge; aptitudes which make one suited for a given job may also make one especially clever or capable. In any case, the effect of this knowledge varies. I didn’t say that ratio had anything to do with fairness or equality. I think that was something you assumed or imputed into my statement. Insurance companies in many jurisdictions are regulated to prevent excess profits. That’s why car insurance companies are sending refund checks; they’re legally obligated to pass on the savings if it costs them less to provide insurance to you. Why is it absurd then to ask for pay commensurate with profits? They call them points in Hollywood movie contracts[1]; they may have other names in other fields. Perhaps companies over a certain value should be required by law or charter to give employees a choice to receive their regular pay as: 1) x% of value generation relative to other employees in the company as assessed by the people in the company and outside data; 2) y% of value generation relative to any other measure, such as company stock or inflation; 3) z, their inflation adjusted prior pay period payment; or 4) the same payment as they received last pay period; whichever is greater, or whichever the employee chooses. Would that be fair to the company? Why or why not? Would that be fair to workers? Seems hard to say how it would be unfair, unless you are a low value, replaceable worker. Is it ideal? Is it even workable? Would employees like having choice and knowledge better than the alternative? Would they like it better than the current status quo? In the interest of market transparency and maximal agency of market actors, which side is the hand of the market on? Some of these questions can be analyzed by looking at worker-owned co-ops and companies. [1] http://www.hollywoodlexicon.com/points.html http://www.hollywoodlexicon.com/points.html
    - deleted 6y ago
- imgabe 6y ago
  In a market economy you don't pay for things in proportion to the value they create, you pay based on the supply and the demand. An EpiPen might save your life, should you pay for it in proportion to the value it creates for you? Or maybe you can pay based on the availability.
  - aspenmayer 6y ago
    If it saves your live, it should be regulated, or the costs otherwise removed or hidden or not placed upon the consumer or end-user. How you do this is important but not to the context of this question. It’s a matter of humanity and morality as much as profits and benefits.
  - rmrfstar 6y ago
    > you pay based on the supply and the demand Your argument takes the form "the market price is the right price," which is basically just a statement of ideology. Supply/demand schedules are as much a product of market structure as they are a function of market participant preferences. You see the HFT folks--who probably agree with your ideology--make this argument any time anyone proposes changes to financial market micro-structure. So, the statement "the market price is the right price" implicitly assumes that the current structure of the market optimizes whatever objective you think markets exist to optimize.
    - imgabe 6y ago
      If you think the market is giving a wrong price or structural issues are not optimizing the right thing, the correct action is to fix those structural issues, not to try and fix prices by fiat. The market will continue to operate around that and distort elsewhere, usually to the detriment of everyone involved. It is not an ideology, it is a fact of how markets operate. If something is in great supply and low demand, the price will be low, and vice versa. This is an observable, objective statement about the nature of the world. Having an ideology that makes you wish the price were something else, doesn't change the reality of how prices of things are determined. The "structural issues" are usually the result of artificial distortions on the supply or the demand that come from the result of well-meaning but misguided efforts to get the "right" price according to one side of the transaction.