7 ms·

In one of my first jobs, I came up with a novel idea to automate a big chunk of work, during the early days of ML. We A/B tested it and it increased the company

In one of my first jobs, I came up with a novel idea to automate a big chunk of work, during the early days of ML. We A/B tested it and it increased the company’s revenue by like a third while decreasing costs (and this wasn’t a tiny company). It took a whole team a few months to implement the idea, as it involved a few different skill sets. To your point, who deserved to capture the value here? Well there was an A/B test to clearly show what caused the boost, and a simple trail from my research (done on my own initiative) to the team's implementation to the revenue, so we at least knew that this group of people was collectively responsible. Nobody got raises, bonuses, or anything. If we had captured that value it would have had to multiply our comp many times over. So why should I have ever gone above and beyond in the first place? Meanwhile my manager repeatedly complained to me that I only worked 9-5. This early experience was formative in my workplace opinions. Go figure.

6gvONxR4sf7o 6y ago
[I'm adding thoughts here instead of editing the above] Speaking more broadly, these kinds of misaligned incentives are probably doing massive damage to the economy, in terms of lost productivity and innovation. A huge chunk of the people who should be productive and be innovating literally don't have an incentive to do anything above and beyond keeping their job. It's all adversarial and extractive instead of cooperative. On both sides. Employers won't pay workers for the value the workers provide, and in return workers surf HN and reddit all day. Meanwhile, apparently there's some kind of epidemic of "bullshit jobs." Again, go figure.
- WorldMaker 6y ago
  Arguably the incentives aren't aligned, innovation isn't happening, and "bullshit jobs" all exist because we've hit some sort of maximal productivity trough where the free market doesn't feel a need to incentivize innovation/productivity any further. This is often what a lot of people mean when they claim we've hit "late stage capitalism": it is possible the paperclip maximizers have already "eaten the world", turned everything to paperclips, and all that is left is "bullshit jobs". There's no reason to incentivize innovation because everything is already paperclips.
  - jazzdev 6y ago
    This is why innovation happens in startups where the incentives are better aligned.
- teclordphrack2 6y ago
  Im in the same boat as you. Have been working 2 to 4 hours each night extra for my job. I needed to come in 1 hour late twice two weeks in a row and got called into my bosses office. He said "We are an 8 to 5 office." I told him about my extra work and he just repeated the quote above. I now work 8 to 5 only and do much less.
  - chucky_z 6y ago
    Weird. I tell my folks to get their work done and I expect them to schedule their own time because I trust them as professionals. If they need to work between 6pm to 2am or 4am to 10am because that's when they're the most productive, or they're dealing with something in life and they're still getting the work done I trust them. I feel folks get fully jaded because everyone sets up all this rigidity and there's a huge lost of mutual trust and respect because of it. Coming in twice an hour late and being ridiculed about it is ridiculous. This is professional life, not some strict grade school.
    - bradlys 6y ago
      In all likelihood, those people are under pressure from their bosses. They need the appearance of everyone being there and working hard. For some people in managerial positions, any kind of data showing the employees still working won't be enough... They want to see asses in seats and all at the same time. I've had to work under many executives like this and it's pretty annoying. They can't be reasoned with. Oh and the faster your people work - the worse it is for people who rely on headcount for their job. They can't justify a larger headcount if everyone is working efficiently...
  - throwaway9191a 6y ago
    I had a similar experience early in my career working in a call center. We received a lot of calls about 1 problem with customer modems. I wrote a script that detected snmptraps and automatically issued bounce commands to the remote modems. Our call volume dropped noticeably. I told my manager why. He was pissed, and asked how we were going to justify headcount if our call volume was dropping. Lesson learned. [edit: the ambiguous lesson is intentional. I stopped trying, but he kept everyone employed. So... lesson learned :)]
- zcw100 6y ago
  I hate to break this to you but what you’re describing is capitalism.
sxates 6y ago
Is this something you could have used to create a startup to compete with your previous employer?
- 6gvONxR4sf7o 6y ago
  It's tough to say. I was young and didn't have the kind of capital to do that myself. It was in the depths of a shitty economy and this hypothetical start up wouldn't have had much of a moat, so I don't think that it would've been easy to get outside capital either. And what would the pitch be? We can do this non-unicorn company's job better and still not be a unicorn? This was right round the beginning of the whole 'everything has to be a unicorn' thing, or at least my awareness of it. It's unfortunate that the only way to capture the value of my innovation might have been "well, just be an owner instead of a worker."
necrotic_comp 6y ago
In a just world, you would've gotten a slice of the revenue. Especially in tech, where your performance can be a revenue multiplier and continue to pay dividends for years, it should be that the people who make the change should be incentivised to do so.
- war1025 6y ago
  That's why companies give you stock.
  - benlivengood 6y ago
    I'd say this is why companies give bonuses. Stock is fungible for cash unless the company is private, in which cases a stock bonus can be meaningfully different from a cash bonus.
    - sokoloff 6y ago
      I (mostly) disagree. If I receive an RSU grant that vests over 4 years, it's not just because the company hopes I'll stay that long but primarily because the company hopes that will align my incentives with the shareholders' incentives. If I work to make the company better over a multi-year period, we all win together. If they instead just give me the equivalent value in cash salary, my incentive is to extend my term of employment, not the value of the company.
      - benhurmarcel 6y ago
        That works for small companies. In my large group, whether I do a stellar job or slack on HN all day won't influence the stock price by a cent.
        sokoloff 6y ago
        Do you have an idea of why the shareholders permit you to stay employed then? I believe that they, via management, believe that the aggregate of what you and your colleagues do is contributing to the overall enterprise value, even if your individual contribution is much smaller than a penny per share.
nanomonkey 6y ago
When early socialist/communists were researching cybernetics they latched on to the idea of predictive production management, to "guide" the collective workforce. I believe they should have used their new computation capabilities to capture the bits of workforce innovation and value addition to create positive feedback loops, to reward innovative and value added behavior.
- nickff 6y ago
  Socialists and communists have always fixated on capital accumulation as the reason for productivity increases; thus it would be somewhat unnatural for them to reward individuals for what they see as a collective effort.
  - newen 6y ago
    Marxism, at least, centers on the idea that the worker should be compensated fairly for the labor/value that he or she produces. It’s in the first chapter of Capital, after all. Communism I think is about how the workers can bring about this fair compensation through politics (by the proletariat banding together, for example).
    - JAlexoid 6y ago
      That's Marxism's initial redistributive aspect, not the core principle. Capital was the foundation for Marxism's development, not the final stage. It's more a case of critique of laisez-faire imperialist capitalism, than anything else.
  - HarryHirsch 6y ago
    What do you make of the Hero of Labour award then? They not only went to particularly productive labourers but also do engineers and scientists (Sakharov is probably best known). Engineering and science is an individual effort, although of course you belong to a greater collective that supported you.
    - 6y ago
troupe 6y ago
Was this a job at a place that was a such a small startup that you were being paid partially in stock? Or was this a larger company where you didn't have to take that risk? My point is that there are places where your contribution to the overall success is more directly related to what you are paid, however many people don't want to work at those places because it involves significantly more risk. Let's say you have a nearly 100% chance of making $50k for the next 10 years for a total of $500k. Alternatively you can take a 10% chance at making $5 million total over the next 10 years. The reason that there is potential for a larger payout in the second job is because you are taking a greater risk. If you were working at a company where someone else was taking the risk, then the rewards likely flowed to those people. For many young people, their first job gives them some data points about what they are actually capable of delivering so they can choose to work at places that trend toward rewarding contribution (startup, self-employed, etc.) or at places that don't (like your company) based on what type of performance they are capable of providing.
titanomachy 6y ago
There are a few people who are capable of such remarkable profit-increasing feats. Most companies rarely encounter them, and have never bothered setting up systems to reward that kind of work. Many of these people eventually end up working at companies that _do_ have such systems. Anecdata: a friend of mine recently found a clever hack that increased ad revenue on a major product by some fraction of a percent for one of the world's largest internet companies. His bonus that year was equivalent to a down payment on a nice house.
- war1025 6y ago
  > There are a few people who are capable of such remarkable profit-increasing feats My brother is an industrial engineer. His job is literally "make processes more efficient." As in, "This month, I increased the yield efficiency by X percent, saving the company Y millions of dollars per year in perpetuity" It'd be great for him if he got some sort of commission off those gains, but he is paid pretty well to do what he does, and he enjoys the work. Increases in efficiency are great for profits, but they are also the reason prices of things come down over time.
throwaway1777 6y ago
Of course the company deserves to capture the value, they are already paying you and expect some return on investment (from paying you). Your contribution would’ve been zero without the company and your teammates who are also only there because the company built the team.
- entropicdrifter 6y ago
  Yeah, but when they go ahead and capture 100% of the value by never giving bonuses or raises they're incentivizing mediocrity, both in the form of brain-drain due to the most innovative employees seeking greener pastures once their resumes are updated and in the form of employees who may have otherwise had the potential to go above and beyond never feeling any external motivation to do so.
  - WalterBright 6y ago
    Such companies wind up doing poorly.
yibg 6y ago
If you made a significant contribution (and it certainly sounds like you did) then you should probably have gotten some reward for doing a good job, maybe raise or promotion etc. However just because you increased revenue with you test in no way means you deserve to capture the value of it. You didn’t do it in isolation. At the very least the reason you were able to increase revenue by a third was because there was a revenue and a customer base to start with. You didn’t create that, that was given to you to leverage off of. I assume you had infrastructure and tooling support as well. So at the very least that increase revenue should be distributed amongst other employees that build the foundation in the first place.
- sokoloff 6y ago
  Further, you can't expect to capture all or most of the upside unless you're also willing to risk the downside. Maybe the A/B test would show no change. Maybe it would show a slight loss. Do you still expect to be paid your salary for the work that went into that? If you do, you shouldn't expect to capture all the upside. Imagine 5 teams set out to run $100K experiments; 4 teams fail and 1 team creates a $1M gross win. On net, $500K of value was created. The company can't weather the losses from the 4 teams and pay out 100% of the upside ($900K) of the 5th experiment to the 5th team.
- plasticchris 6y ago
  Funny but I think that finance does this right - give me x dollars to manage and I get some percent of the upside if any. In that case you didn't earn the capital but your effect in leveraging it is tied directly to your comp.
WalterBright 6y ago
This sort of thing is the ideal item to put on your resume when looking for a higher paying job. Anything concrete about value provided in your previous job is worth gold to your next employer.
fxtentacle 6y ago
I believe this is how many companies get started. You consult a lawyer, build things in your free time, then rent it back to your old employer as a SaaS and maybe give them 10% off for being your first customer. So companies are effectively driving their employees towards creating future competition, as that seems to be the only way left for inventors to capture the value they create.
- throwaway0a5e 6y ago
  >So companies are effectively driving their employees towards creating future competition, Or future complimentary product/service. A company that runs call centers doesn't wanna make call center software but if they can buy call center SaaS (or whatever) that makes them more efficient they're happy and the guy they're buying from is happy.
saiojd 6y ago
Out of curiosity did you push for a raise? Not criticizing btw, just wondering how things played out
yourapostasy 6y ago
I've observed a correlation between successful high-complexity, high-risk, high-unknowns, high-payoff efforts and high-trust work environments, that extend down to the lowest rungs of an organization's totem pole. I suspect it works this way because to put it into software architecture terms, the trust is a microservice delivery model prerequisite, so people can loosely couple as needed to efficiently work on blockers. I find it ironic that many laypeople see the US military as a rigidly stratified, top-down command and control organization, but speaking to many military members, I find the amount of trust (once earned) placed in startlingly young and junior members far exceeds most commercial organizations. Despite all the military war stories of ineptitude and incompetence, I don't think it is a coincidence that compared to the average commercial organization, the military is still perceived by many to "get 'er done". This is fantastically difficult to achieve because it requires a from-the-top commitment to developing human, empathic leadership on top of management (which is already a difficult to master skill set by itself). It takes enormous emotional guts and vulnerability to be in that kind of leadership; I know it would challenge my personal limits for sure, possibly even break them. This takes decades of continuous work without interruption through top leadership succession evolutions.
908B64B197 6y ago
I often see employers whining their employees don't go the extra mile... without giving the employees any incentives of doing so! What I tell folks I mentor is that a job isn't serious if there's no stocks or bonus in the compensation package. For that specific example, it's because there was no risk on your end for developing the product. To capture it's value the IP would have needed to be developed outside the company and licensed to it. But that's way more risky. > So why should I have ever gone above and beyond in the first place? Meanwhile my manager repeatedly complained to me that I only worked 9-5. You shouldn't have, at least, not there. Clearly they had no clue how innovation happens and how to create an environment where the type of people who innovate ends up.

6gvONxR4sf7o 6y ago

[I'm adding thoughts here instead of editing the above] Speaking more broadly, these kinds of misaligned incentives are probably doing massive damage to the economy, in terms of lost productivity and innovation. A huge chunk of the people who should be productive and be innovating literally don't have an incentive to do anything above and beyond keeping their job. It's all adversarial and extractive instead of cooperative. On both sides. Employers won't pay workers for the value the workers provide, and in return workers surf HN and reddit all day. Meanwhile, apparently there's some kind of epidemic of "bullshit jobs." Again, go figure.

WorldMaker 6y ago
Arguably the incentives aren't aligned, innovation isn't happening, and "bullshit jobs" all exist because we've hit some sort of maximal productivity trough where the free market doesn't feel a need to incentivize innovation/productivity any further. This is often what a lot of people mean when they claim we've hit "late stage capitalism": it is possible the paperclip maximizers have already "eaten the world", turned everything to paperclips, and all that is left is "bullshit jobs". There's no reason to incentivize innovation because everything is already paperclips.
- jazzdev 6y ago
  This is why innovation happens in startups where the incentives are better aligned.
teclordphrack2 6y ago
Im in the same boat as you. Have been working 2 to 4 hours each night extra for my job. I needed to come in 1 hour late twice two weeks in a row and got called into my bosses office. He said "We are an 8 to 5 office." I told him about my extra work and he just repeated the quote above. I now work 8 to 5 only and do much less.
- chucky_z 6y ago
  Weird. I tell my folks to get their work done and I expect them to schedule their own time because I trust them as professionals. If they need to work between 6pm to 2am or 4am to 10am because that's when they're the most productive, or they're dealing with something in life and they're still getting the work done I trust them. I feel folks get fully jaded because everyone sets up all this rigidity and there's a huge lost of mutual trust and respect because of it. Coming in twice an hour late and being ridiculed about it is ridiculous. This is professional life, not some strict grade school.
  - bradlys 6y ago
    In all likelihood, those people are under pressure from their bosses. They need the appearance of everyone being there and working hard. For some people in managerial positions, any kind of data showing the employees still working won't be enough... They want to see asses in seats and all at the same time. I've had to work under many executives like this and it's pretty annoying. They can't be reasoned with. Oh and the faster your people work - the worse it is for people who rely on headcount for their job. They can't justify a larger headcount if everyone is working efficiently...
- throwaway9191a 6y ago
  I had a similar experience early in my career working in a call center. We received a lot of calls about 1 problem with customer modems. I wrote a script that detected snmptraps and automatically issued bounce commands to the remote modems. Our call volume dropped noticeably. I told my manager why. He was pissed, and asked how we were going to justify headcount if our call volume was dropping. Lesson learned. [edit: the ambiguous lesson is intentional. I stopped trying, but he kept everyone employed. So... lesson learned :)]
zcw100 6y ago
I hate to break this to you but what you’re describing is capitalism.

sxates 6y ago

Is this something you could have used to create a startup to compete with your previous employer?

6gvONxR4sf7o 6y ago
It's tough to say. I was young and didn't have the kind of capital to do that myself. It was in the depths of a shitty economy and this hypothetical start up wouldn't have had much of a moat, so I don't think that it would've been easy to get outside capital either. And what would the pitch be? We can do this non-unicorn company's job better and still not be a unicorn? This was right round the beginning of the whole 'everything has to be a unicorn' thing, or at least my awareness of it. It's unfortunate that the only way to capture the value of my innovation might have been "well, just be an owner instead of a worker."

necrotic_comp 6y ago

In a just world, you would've gotten a slice of the revenue. Especially in tech, where your performance can be a revenue multiplier and continue to pay dividends for years, it should be that the people who make the change should be incentivised to do so.

war1025 6y ago
That's why companies give you stock.
- benlivengood 6y ago
  I'd say this is why companies give bonuses. Stock is fungible for cash unless the company is private, in which cases a stock bonus can be meaningfully different from a cash bonus.
  - sokoloff 6y ago
    I (mostly) disagree. If I receive an RSU grant that vests over 4 years, it's not just because the company hopes I'll stay that long but primarily because the company hopes that will align my incentives with the shareholders' incentives. If I work to make the company better over a multi-year period, we all win together. If they instead just give me the equivalent value in cash salary, my incentive is to extend my term of employment, not the value of the company.
    - benhurmarcel 6y ago
      That works for small companies. In my large group, whether I do a stellar job or slack on HN all day won't influence the stock price by a cent.
      - sokoloff 6y ago
        Do you have an idea of why the shareholders permit you to stay employed then? I believe that they, via management, believe that the aggregate of what you and your colleagues do is contributing to the overall enterprise value, even if your individual contribution is much smaller than a penny per share.

nanomonkey 6y ago

When early socialist/communists were researching cybernetics they latched on to the idea of predictive production management, to "guide" the collective workforce. I believe they should have used their new computation capabilities to capture the bits of workforce innovation and value addition to create positive feedback loops, to reward innovative and value added behavior.

nickff 6y ago
Socialists and communists have always fixated on capital accumulation as the reason for productivity increases; thus it would be somewhat unnatural for them to reward individuals for what they see as a collective effort.
- newen 6y ago
  Marxism, at least, centers on the idea that the worker should be compensated fairly for the labor/value that he or she produces. It’s in the first chapter of Capital, after all. Communism I think is about how the workers can bring about this fair compensation through politics (by the proletariat banding together, for example).
  - JAlexoid 6y ago
    That's Marxism's initial redistributive aspect, not the core principle. Capital was the foundation for Marxism's development, not the final stage. It's more a case of critique of laisez-faire imperialist capitalism, than anything else.
- HarryHirsch 6y ago
  What do you make of the Hero of Labour award then? They not only went to particularly productive labourers but also do engineers and scientists (Sakharov is probably best known). Engineering and science is an individual effort, although of course you belong to a greater collective that supported you.
  - 6y ago

troupe 6y ago

Was this a job at a place that was a such a small startup that you were being paid partially in stock? Or was this a larger company where you didn't have to take that risk? My point is that there are places where your contribution to the overall success is more directly related to what you are paid, however many people don't want to work at those places because it involves significantly more risk. Let's say you have a nearly 100% chance of making $50k for the next 10 years for a total of $500k. Alternatively you can take a 10% chance at making $5 million total over the next 10 years. The reason that there is potential for a larger payout in the second job is because you are taking a greater risk. If you were working at a company where someone else was taking the risk, then the rewards likely flowed to those people. For many young people, their first job gives them some data points about what they are actually capable of delivering so they can choose to work at places that trend toward rewarding contribution (startup, self-employed, etc.) or at places that don't (like your company) based on what type of performance they are capable of providing.

titanomachy 6y ago

There are a few people who are capable of such remarkable profit-increasing feats. Most companies rarely encounter them, and have never bothered setting up systems to reward that kind of work. Many of these people eventually end up working at companies that _do_ have such systems. Anecdata: a friend of mine recently found a clever hack that increased ad revenue on a major product by some fraction of a percent for one of the world's largest internet companies. His bonus that year was equivalent to a down payment on a nice house.

war1025 6y ago
> There are a few people who are capable of such remarkable profit-increasing feats My brother is an industrial engineer. His job is literally "make processes more efficient." As in, "This month, I increased the yield efficiency by X percent, saving the company Y millions of dollars per year in perpetuity" It'd be great for him if he got some sort of commission off those gains, but he is paid pretty well to do what he does, and he enjoys the work. Increases in efficiency are great for profits, but they are also the reason prices of things come down over time.

throwaway1777 6y ago

Of course the company deserves to capture the value, they are already paying you and expect some return on investment (from paying you). Your contribution would’ve been zero without the company and your teammates who are also only there because the company built the team.

entropicdrifter 6y ago
Yeah, but when they go ahead and capture 100% of the value by never giving bonuses or raises they're incentivizing mediocrity, both in the form of brain-drain due to the most innovative employees seeking greener pastures once their resumes are updated and in the form of employees who may have otherwise had the potential to go above and beyond never feeling any external motivation to do so.
- WalterBright 6y ago
  Such companies wind up doing poorly.

yibg 6y ago

If you made a significant contribution (and it certainly sounds like you did) then you should probably have gotten some reward for doing a good job, maybe raise or promotion etc. However just because you increased revenue with you test in no way means you deserve to capture the value of it. You didn’t do it in isolation. At the very least the reason you were able to increase revenue by a third was because there was a revenue and a customer base to start with. You didn’t create that, that was given to you to leverage off of. I assume you had infrastructure and tooling support as well. So at the very least that increase revenue should be distributed amongst other employees that build the foundation in the first place.

sokoloff 6y ago
Further, you can't expect to capture all or most of the upside unless you're also willing to risk the downside. Maybe the A/B test would show no change. Maybe it would show a slight loss. Do you still expect to be paid your salary for the work that went into that? If you do, you shouldn't expect to capture all the upside. Imagine 5 teams set out to run $100K experiments; 4 teams fail and 1 team creates a $1M gross win. On net, $500K of value was created. The company can't weather the losses from the 4 teams and pay out 100% of the upside ($900K) of the 5th experiment to the 5th team.
plasticchris 6y ago
Funny but I think that finance does this right - give me x dollars to manage and I get some percent of the upside if any. In that case you didn't earn the capital but your effect in leveraging it is tied directly to your comp.

WalterBright 6y ago

This sort of thing is the ideal item to put on your resume when looking for a higher paying job. Anything concrete about value provided in your previous job is worth gold to your next employer.

fxtentacle 6y ago

I believe this is how many companies get started. You consult a lawyer, build things in your free time, then rent it back to your old employer as a SaaS and maybe give them 10% off for being your first customer. So companies are effectively driving their employees towards creating future competition, as that seems to be the only way left for inventors to capture the value they create.

throwaway0a5e 6y ago
>So companies are effectively driving their employees towards creating future competition, Or future complimentary product/service. A company that runs call centers doesn't wanna make call center software but if they can buy call center SaaS (or whatever) that makes them more efficient they're happy and the guy they're buying from is happy.

saiojd 6y ago

Out of curiosity did you push for a raise? Not criticizing btw, just wondering how things played out

yourapostasy 6y ago

I've observed a correlation between successful high-complexity, high-risk, high-unknowns, high-payoff efforts and high-trust work environments, that extend down to the lowest rungs of an organization's totem pole. I suspect it works this way because to put it into software architecture terms, the trust is a microservice delivery model prerequisite, so people can loosely couple as needed to efficiently work on blockers. I find it ironic that many laypeople see the US military as a rigidly stratified, top-down command and control organization, but speaking to many military members, I find the amount of trust (once earned) placed in startlingly young and junior members far exceeds most commercial organizations. Despite all the military war stories of ineptitude and incompetence, I don't think it is a coincidence that compared to the average commercial organization, the military is still perceived by many to "get 'er done". This is fantastically difficult to achieve because it requires a from-the-top commitment to developing human, empathic leadership on top of management (which is already a difficult to master skill set by itself). It takes enormous emotional guts and vulnerability to be in that kind of leadership; I know it would challenge my personal limits for sure, possibly even break them. This takes decades of continuous work without interruption through top leadership succession evolutions.

908B64B197 6y ago

I often see employers whining their employees don't go the extra mile... without giving the employees any incentives of doing so! What I tell folks I mentor is that a job isn't serious if there's no stocks or bonus in the compensation package. For that specific example, it's because there was no risk on your end for developing the product. To capture it's value the IP would have needed to be developed outside the company and licensed to it. But that's way more risky. > So why should I have ever gone above and beyond in the first place? Meanwhile my manager repeatedly complained to me that I only worked 9-5. You shouldn't have, at least, not there. Clearly they had no clue how innovation happens and how to create an environment where the type of people who innovate ends up.