5 ms·

Liquidity of Skill

53 points by thesephist 5y ago

Kinrany 5y ago
I can't tell if "liquidity" is any more specific than just "demand".
- danuker 5y ago
  "Liquid" as in "can sell easily", not "in demand". 5-dollar gigs are liquid (lots of people are willing to spend $5), but you won't make much money in total with them. The author gives the example: suppose one makes as much money programming vs. making Korean food. As a programmer you can be anywhere, but as a chef you depend on ingredients, the restaurant, and a physical presence near clients.
- 0x008 5y ago
  It is the overlap of demand and supply curves, in finance you would call it an order book I think: How much of my supply is going to sell right now at price X or higher.
qsort 5y ago
I think the author is actually mixing two concepts: (a) being in demand. Programming is not of exceptionally high value, but it's in demand and it's going to be in demand for the foreseeable future. Value isn't inherent in the good or service being offered and it doesn't make sense to talk of value as such, it's a function of supply and demand. (b) some careers have more top-heavy rewards than others. A mediocre musician or a mediocre sportsman can expect $0, a mediocre programmer can expect a comfortable wage. Maybe the tails are so fat that the expectation evens out, but the distributions have radically different shapes. It's not "liquidity", it's that you're in a business where if you're not four standard deviations better than the average you're as useless as any random person.
- hyperpallium2 5y ago
  Price is a function of supply and demand. I used to think programming was of exceptionally high value, like intelligence or life itself, because it could augment your intelligence, by making tools and components. But getting the right concept, ui, design, implementation, debugging and documentation is so much work that it's not worth it unless for a whole commununity, open-source, commercial or internal. I speak as having made a commercially successful tool (and many small personal tools and components). Perhaps all makers - from knappers to geometricians - have had this realization.
  - pydry 5y ago
    Outside of commodity goods and services (which programming certainly is not) I don't think there is a straightforward relationship between supply, demand and price.
    - bruce343434 5y ago
      programming is a service: to create a good (software) for a client (maybe your boss)
    - vorpalhex 5y ago
      Any programming market, such as Austin, Texas, will see salary offers increase when demand increases more than supply. Unless you are actively renegotiating your pay every year you won't see this as an employed engineer.
  - antoniuschan99 5y ago
    That can be said for any profession. Actors or Musicians still have to be supported by roadies, sound people, videographers, editors, etc. Programming is elevated because it automates and scales services that are in the past done by humans. It also spans across many different industries in that the one skill touches on many different parts of our lives. And also, like in the liquidity example he mentioned comparing to creating Korean food, is that technology is insanely accessible now (anything digital really). But also, compared to musicians and actors, they still need to be at a certain place to perform their work (as we saw in the past year online concerts never really panned out).
- topaz0 5y ago
  Your (a) is about the difference between use value and exchange value.
  - TX0098812 5y ago
    Those are really the same for all practical purposes. Intangible types of value belong in philosophical discussions, not economics.
    - topaz0 5y ago
      You can draw that line around economics if you want, but I'm ultimately more interested in the consequences of economics for human purposes. That necessarily involves considering market value and human values as separate kinds of things. Related of course, but different.
- ed_balls 5y ago
  > A mediocre musician or a mediocre sportsman can expect $0, It's actually worse than that. If you go to school and invest a lot the expected value is negative.
noduerme 5y ago
Kind of gross analysis written by someone who's been employed as a coder for max 2-3 years. Your liquidity and value are nothing - NOTHING - compared with technical debt and lock-in. You look at this market as a new coder and think you understand it, but you have no clue. Here's an example. What good are any of your skills if you have to spend a year tearing apart some code written in 2004 ...even if you get paid $300k to do it? How far forward have you put yourself? Conversely, if you write some code right now on the arm or let's say, $60k +20% for a startup, and it goes big, are you fireable? I guess it depends on your relevance to the company. Nothing here means anything, because liquidity of skill is a concept only argued over by people who lack both. The firmament is necessity. The guarantee of success is your indispensability. Then, God help ya cause you and your clients will unto death not part.
- jatins 5y ago
  I don't think we should be disregarding an opinion just because the it comes from someone who is less experienced in the industry.
- TX0098812 5y ago
  Lots of ad hominem here...
pydry 5y ago
I'm not really sure what phenomenon he's describing but I don't think it's liquidity. I thought it was going to be about the difference between specializing in something where gigs come along infrequently (e.g. postgresql consultancy) vs. things (like Java dev) where there's always gonna be someone out there hiring.
- conformist 5y ago
  Exactly. Additionally, liquidity would probably also imply that if you had a skill associated with an illiquid market, you'd earn a premium for that (b/c hard to find a replacement). This condition doesn't seem to be met by the definition in the article.
lordnacho 5y ago
I think the idea of value is a lot deeper than the article presents. There's a whole train of thought from the physiocrats to Marx and subjective utility that isn't easily summarized. Suffice to say it's not informative to separate fundamental value as some kind of clear thing. Liquidity is about how easily you can turn the asset into something fungible (like money) without giving up too much. You can give me your house for 50% under the market value today if you like, or you can wait half a year for someone to pay full price, houses have this issue of mostly being illiquid. If you had shares in a company like Google, you could dump them on the market and recover the price of a house without a huge drop in the amount you'd get. So how liquid are software skills? Well let's suppose you're a dev who normally would get paid $200K a year. How would we come to a number about how liquid that skill is? One way might be to think about how long it takes to get a new job. Currently, it's not long at all. Maybe a couple of months, three? So if you were out of work you'd miss out on 50k of salary until you got your job. But also that's a flow of income, not a one-time capital payment like the house or the shares. Your job would probably last 5 years and thus pay $1m? So a 5% liq cost for searching as a first guess. (We can add wrinkles like interest rates, increasing salary and salary uncertainty later).
angarg12 5y ago
I see two phenomenon explained with the same cause here. One is high salaries in tech, and other is very broadly "how to be successful". For the first one, I think it is very simply explained by offer and demand, amongst others. For the second one, I like the Luck Surface Area [1] mental model better. I kind of like the concept of liquidity of skills, but honestly I don't think it explains what the author claims. [1] https://www.codusoperandi.com/posts/increasing-your-luck-surface-area https://www.codusoperandi.com/posts/increasing-your-luck-sur...
- chrisweekly 5y ago
  Attention all bloggers and blog platform / template creators: PLEASE. Always. Include. Publication date. Even non-technical "evergreen" posts benefit hugely from providing context for phrases like "a few months ago" or "in recent years".
France_is_bacon 5y ago
"If I’m only a mediocre programmer, but there are 10,000 people who know exactly how good I am, I’m going to be able to make more money and get hired quicker than a world-class programmer who anyone barely knows." This is the truest thing ever. Basically it is marketing. Marketing yourself. The best way to market yourself is to do public speaking or public writing. I knew a guy once, he gave at least 2 technical talks every week to various technical users groups, associations, conferences - if there was a gathering of two or more people, he'd be talking there. They guy got 2-3 job offers every single day. You do public speaking for 5 years, and the whole world will know you. You are seen as a leader, when you get up on stage. And the same is true for writing if you don't like public speaking, although public speaking is better as people see you in the flesh. Both speaking and writing together is the best. I know another person, gave a public speech at a company on an important new technology they were adopting when she was an intern. She was a beautiful shiny penny, and gave the talk with verve, pizazz, panache, and humor. She shot way up the ladder at that company, faster than people with a ton more experience and knowledge. Because she was seen as a thought leader. She really didn't know shit about technology either, but that's just how peoples' minds work. You get up in front of people and know 10% more than most of them, and, bam, you're an expert and thought leader. Of course, there will always be those who will say, "I talked to him/her, and he/she doesn't know shit, why are they getting promoted over me when I know more? All that fucking political ass-kissing/brown-nosing, etc." And they are right in terms of knowledge of the skill. But they could just as easily build their skill on public speaking or writing, in order to be known, but they don't. To be known, you have to get known. Public speaking and public writing are the easiest options that are available to all. If you've never done either, partner up with someone who has. Be a co-author or co-speaker. It's ok to fluck up, as long as you keep getting better every time.

Liquidity of Skill

53 points by thesephist 5y ago

Kinrany 5y ago

I can't tell if "liquidity" is any more specific than just "demand".

danuker 5y ago
"Liquid" as in "can sell easily", not "in demand". 5-dollar gigs are liquid (lots of people are willing to spend $5), but you won't make much money in total with them. The author gives the example: suppose one makes as much money programming vs. making Korean food. As a programmer you can be anywhere, but as a chef you depend on ingredients, the restaurant, and a physical presence near clients.
0x008 5y ago
It is the overlap of demand and supply curves, in finance you would call it an order book I think: How much of my supply is going to sell right now at price X or higher.

qsort 5y ago

I think the author is actually mixing two concepts: (a) being in demand. Programming is not of exceptionally high value, but it's in demand and it's going to be in demand for the foreseeable future. Value isn't inherent in the good or service being offered and it doesn't make sense to talk of value as such, it's a function of supply and demand. (b) some careers have more top-heavy rewards than others. A mediocre musician or a mediocre sportsman can expect $0, a mediocre programmer can expect a comfortable wage. Maybe the tails are so fat that the expectation evens out, but the distributions have radically different shapes. It's not "liquidity", it's that you're in a business where if you're not four standard deviations better than the average you're as useless as any random person.

hyperpallium2 5y ago
Price is a function of supply and demand. I used to think programming was of exceptionally high value, like intelligence or life itself, because it could augment your intelligence, by making tools and components. But getting the right concept, ui, design, implementation, debugging and documentation is so much work that it's not worth it unless for a whole commununity, open-source, commercial or internal. I speak as having made a commercially successful tool (and many small personal tools and components). Perhaps all makers - from knappers to geometricians - have had this realization.
- pydry 5y ago
  Outside of commodity goods and services (which programming certainly is not) I don't think there is a straightforward relationship between supply, demand and price.
  - bruce343434 5y ago
    programming is a service: to create a good (software) for a client (maybe your boss)
  - vorpalhex 5y ago
    Any programming market, such as Austin, Texas, will see salary offers increase when demand increases more than supply. Unless you are actively renegotiating your pay every year you won't see this as an employed engineer.
- antoniuschan99 5y ago
  That can be said for any profession. Actors or Musicians still have to be supported by roadies, sound people, videographers, editors, etc. Programming is elevated because it automates and scales services that are in the past done by humans. It also spans across many different industries in that the one skill touches on many different parts of our lives. And also, like in the liquidity example he mentioned comparing to creating Korean food, is that technology is insanely accessible now (anything digital really). But also, compared to musicians and actors, they still need to be at a certain place to perform their work (as we saw in the past year online concerts never really panned out).
topaz0 5y ago
Your (a) is about the difference between use value and exchange value.
- TX0098812 5y ago
  Those are really the same for all practical purposes. Intangible types of value belong in philosophical discussions, not economics.
  - topaz0 5y ago
    You can draw that line around economics if you want, but I'm ultimately more interested in the consequences of economics for human purposes. That necessarily involves considering market value and human values as separate kinds of things. Related of course, but different.
ed_balls 5y ago
> A mediocre musician or a mediocre sportsman can expect $0, It's actually worse than that. If you go to school and invest a lot the expected value is negative.

noduerme 5y ago

Kind of gross analysis written by someone who's been employed as a coder for max 2-3 years. Your liquidity and value are nothing - NOTHING - compared with technical debt and lock-in. You look at this market as a new coder and think you understand it, but you have no clue. Here's an example. What good are any of your skills if you have to spend a year tearing apart some code written in 2004 ...even if you get paid $300k to do it? How far forward have you put yourself? Conversely, if you write some code right now on the arm or let's say, $60k +20% for a startup, and it goes big, are you fireable? I guess it depends on your relevance to the company. Nothing here means anything, because liquidity of skill is a concept only argued over by people who lack both. The firmament is necessity. The guarantee of success is your indispensability. Then, God help ya cause you and your clients will unto death not part.

jatins 5y ago
I don't think we should be disregarding an opinion just because the it comes from someone who is less experienced in the industry.
TX0098812 5y ago
Lots of ad hominem here...

pydry 5y ago

I'm not really sure what phenomenon he's describing but I don't think it's liquidity. I thought it was going to be about the difference between specializing in something where gigs come along infrequently (e.g. postgresql consultancy) vs. things (like Java dev) where there's always gonna be someone out there hiring.

conformist 5y ago
Exactly. Additionally, liquidity would probably also imply that if you had a skill associated with an illiquid market, you'd earn a premium for that (b/c hard to find a replacement). This condition doesn't seem to be met by the definition in the article.

lordnacho 5y ago

I think the idea of value is a lot deeper than the article presents. There's a whole train of thought from the physiocrats to Marx and subjective utility that isn't easily summarized. Suffice to say it's not informative to separate fundamental value as some kind of clear thing. Liquidity is about how easily you can turn the asset into something fungible (like money) without giving up too much. You can give me your house for 50% under the market value today if you like, or you can wait half a year for someone to pay full price, houses have this issue of mostly being illiquid. If you had shares in a company like Google, you could dump them on the market and recover the price of a house without a huge drop in the amount you'd get. So how liquid are software skills? Well let's suppose you're a dev who normally would get paid $200K a year. How would we come to a number about how liquid that skill is? One way might be to think about how long it takes to get a new job. Currently, it's not long at all. Maybe a couple of months, three? So if you were out of work you'd miss out on 50k of salary until you got your job. But also that's a flow of income, not a one-time capital payment like the house or the shares. Your job would probably last 5 years and thus pay $1m? So a 5% liq cost for searching as a first guess. (We can add wrinkles like interest rates, increasing salary and salary uncertainty later).

angarg12 5y ago

I see two phenomenon explained with the same cause here. One is high salaries in tech, and other is very broadly "how to be successful". For the first one, I think it is very simply explained by offer and demand, amongst others. For the second one, I like the Luck Surface Area [1] mental model better. I kind of like the concept of liquidity of skills, but honestly I don't think it explains what the author claims. [1] https://www.codusoperandi.com/posts/increasing-your-luck-surface-area https://www.codusoperandi.com/posts/increasing-your-luck-sur...

chrisweekly 5y ago
Attention all bloggers and blog platform / template creators: PLEASE. Always. Include. Publication date. Even non-technical "evergreen" posts benefit hugely from providing context for phrases like "a few months ago" or "in recent years".

France_is_bacon 5y ago

"If I’m only a mediocre programmer, but there are 10,000 people who know exactly how good I am, I’m going to be able to make more money and get hired quicker than a world-class programmer who anyone barely knows." This is the truest thing ever. Basically it is marketing. Marketing yourself. The best way to market yourself is to do public speaking or public writing. I knew a guy once, he gave at least 2 technical talks every week to various technical users groups, associations, conferences - if there was a gathering of two or more people, he'd be talking there. They guy got 2-3 job offers every single day. You do public speaking for 5 years, and the whole world will know you. You are seen as a leader, when you get up on stage. And the same is true for writing if you don't like public speaking, although public speaking is better as people see you in the flesh. Both speaking and writing together is the best. I know another person, gave a public speech at a company on an important new technology they were adopting when she was an intern. She was a beautiful shiny penny, and gave the talk with verve, pizazz, panache, and humor. She shot way up the ladder at that company, faster than people with a ton more experience and knowledge. Because she was seen as a thought leader. She really didn't know shit about technology either, but that's just how peoples' minds work. You get up in front of people and know 10% more than most of them, and, bam, you're an expert and thought leader. Of course, there will always be those who will say, "I talked to him/her, and he/she doesn't know shit, why are they getting promoted over me when I know more? All that fucking political ass-kissing/brown-nosing, etc." And they are right in terms of knowledge of the skill. But they could just as easily build their skill on public speaking or writing, in order to be known, but they don't. To be known, you have to get known. Public speaking and public writing are the easiest options that are available to all. If you've never done either, partner up with someone who has. Be a co-author or co-speaker. It's ok to fluck up, as long as you keep getting better every time.