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Soviet Shoe Factory Principle
- georgeecollins 2y agoWhat gets measured gets done. But, Goodhart's Law "When a measure becomes a target it ceases to be a good measure."
- deleted 2y ago[deleted]
- bell-cot 2y ago> What gets measured gets done. Sometimes. Other times...just look at the US public education system.
- mattigames 2y agoWhat gets measured _and_ the organization is a whole focused on improving such measure they mean.
- mycall 2y agoThat is interesting as the definition of a KPI is a metric with a target as a goal.
- black_13 2y agoThe Theranos Startup Model is just the capitalist equivalent of SSFP: Instead of making useless shoes, they make useless software or fake hardware. Instead of meeting state quotas, they hit VC funding goals. Instead of the government propping them up, investors keep them afloat. 2. Theranos as a “Startup Shoe Factory” Theranos is the perfect capitalist version of the Soviet Shoe Factory: Soviet Model == Theranos Model (Capitalist Equivalent) Shoe factories produced small sizes to meet quotas. Theranos faked blood test results to meet investor expectations. Factories cut material costs and quality to meet output goals. Theranos lied about its technology because real innovation was too slow. Central planners rewarded metrics over reality. VC investors rewarded hype over real products. Factories looked productive on paper, even if they made useless products. Theranos looked like a billion-dollar startup, even though it had no working product. The economy was distorted by planned quotas. The startup world is distorted by fake valuations and exit-driven funding.
- deleted 2y ago[deleted]
- stickfigure 2y agoNah. Theranos was a fraud that survived for 15 years (fewer if you count their active period). "Capitalism" killed it off when the fraud became public and investors stopped giving them money. Capitalism isn't magic, humans can still be fooled. The nice thing about capitalism is that I personally didn't have to give them money. Caveat investor.
- mempko 2y agoYou do know the Soviet System also had money and had the equivalent of 'investors' giving said money to institutions. Money and markets is not what makes capitalsim unique. Hint, it's in the name.
- kevin_thibedeau 2y agoThey weren't operating as a fraud in the beginning. I'd give the benefit of the doubt that Holmes was just naive about the technical issues given her inexperience. They switched to fraud to buy time for the intended product.
- worthless-trash 2y agoIs it acceptable business practice (aka not fraud) to take money from people when an even laymen in the field can detect the level of lies. Rational human beings don't like being tricked, she was a magician of medicinal claims and knew the showmanship requirements. Extraordinary claims require some kind of data and facts to back the claim, which there was none. There is no evidence to believe they could develop this technology, optimism yes, but evidence no. It was fraud from the start.
- cynicalsecurity 2y agoThe corporate world generally resembles Soviet culture a lot to me.
- watwut 2y agoHierarchical structure with basically powerless bottom, strong blindly believed unaccountable top that is primary rewarded for looking certain way. There is going ro be a sociological rule that this thing always leads to similar dysfunctions.
- rqtwteye 2y agoTotally. I visited East Germany a few times when the wall was still up. The communist planned economies were a lot like corporations: 5 year plans, lots of internal propaganda, power struggles in leadership, total distortion of reality, sociopaths making their way to the top, no acceptance of dissent, metrics that make no sense.
- gyomu 2y agoThe nice thing about corporations is that they have to be able to make payroll at the end of every month, otherwise they go bankrupt relatively quickly. Things can get much uglier and be much more protracted for governments.
- wesselbindt 2y agoUnless they get bailed out by the government, or get tax breaks, or do mass layoffs. All of which seem to happen a lot.
- akoboldfrying 2y agoWith you on the bailing out and tax breaks. Mass layoffs though? That's an appropriate response to being uncompetitive.
- rangestransform 2y ago
- tombert 2y agoA similar thing I've noticed in the last ~6 years is in regards to smartphones, and in particular their cameras. Android is pretty standardized these days, and even a fairly cheap Android phone will probably do most smartphone things (make calls, send texts, watch YouTube, etc.) reasonably well, but a corner that seems to be cut in cheaper phones is almost always the camera, and that kind of makes sense. If you're buying your phone online, you can look at the more-or-less objective specs of the phone like how much RAM it has, or how fast the CPU is, but you can't really tell how the photos will look [1], and as such it's easy to put a cheaper sensor or lens in there, especially in the cheaper phones which (I think) have lower margins. [1] Even if the listing has sample pictures, you don't know how representative they are of the actual experience; they could just have taken the sample photos with ideal lighting, with a tripod, in a controlled studio, for example.
- gyomu 2y agoYes, and those crappy sensors will still be 200 megapixels (which will be used as an advertising point), as most people don’t realize that a fantastic 24 MP camera is better than a crummy 200 MP one.
- tombert 2y agoYeah, definitely; megapixels are a more or less objective metric, but they're only one factor to image quality, and nowadays not even really the most important one.
- toast0 2y agoPixel count is objective, but never meant much. Sensor area is much more important, but doesn't make for a sexy number, and it often doesn't make it into the spec sheet.
- patrakov 2y agoWorse; the crappy sensors will be only 8 megapixels or less, but the camera software will inflate that with AI to 200 megapixels.
- mcculley 2y agoIs there any evidence for this story?
- dragonwriter 2y agoAre you asking if there is evidence that the described story was told in Soviet Russia, or are you asking if there is evidence that the obvious parable is an actual factual account?
- mcculley 2y agoI would like to know if there was a shoe factory in Soviet Russia that produced superfluous shoes for children during a shortage of shoes for adults. I am familiar with the problems of centrally planned economies and with the Soviet economies in general. I am wondering if there was an actual instance of this happening with shoes. These memes tend to propagate and mutate through the minds of those who are keen to believe things without evidence.
- krisoft 2y ago“ In Soviet Russia there is a story” This is explicitly labeled as a story. It is a parable used to illustrate a point. Do you also demand evidence of the boy who cried wolf? Or little red riding hood who strayed from the safe path? These are the same kind of things. I would understand your question maybe if the article would purport the existence of the shoe factory. But it doesn’t. And that is not the point of it.
- mcculley 2y agoI am not demanding anything. I am very curious for real stories from the Soviet Union relevant to economics.
- stickfigure 2y agoHere's a whole youtube channel for you: https://www.youtube.com/@UshankaShow https://www.youtube.com/@UshankaShow
- readthenotes1 2y agoMeasurement Dysfunction is a better name for this, tho less colorful and insulting https://en.m.wikipedia.org/wiki/Measurement_dysfunction https://en.m.wikipedia.org/wiki/Measurement_dysfunction
- tlb 2y agoTurns out that $ profit is one of the least gameable metrics. Not completely ungameable, but for a consumer product manufacturer in a free market it's the least gameable metric invented so far.
- einpoklum 2y ago1. Oh, you'd be surprised. 2. "Free" and "market" are fundamentally contradictory terms. But that point is irrespective of the difficulty of quantifying complexity/heft of tasks and goals.
- Scene_Cast2 2y agoI've seen companies actively, knowingly, and purposely trade future growth, user experience, and user retention for immediate profits.
- GJim 2y agoI've seen governments do the same. Many times.
- mempko 2y agoExplain Amazon then, a company notorious for being unprofitable yet producing a great experience. Markets are kind of a dumb thing if you think about it. You take all the qualities of an item and project them into a single scalar we call 'price'. Then use that scalar as a form of comparison. It's comical when you think about it. Seems we need a better technology now that we have computers.
- sien 2y agoAmazon invested profits. For many years ago they could turn a switch and become profitable. The share price kept rising while they were investing profits in expanding. It's far from a fool proof way of doing things, many companies that prioritise growth over profitability wind up with neither, but Amazon managed it. As for prices, no computer can work out my preference or not for a Mac over a PC, or a iPhone over an Android, or how much quality I will pay for in a bike. Prices reveal this. Ludwig von Mises said this was why Communism wouldn't work in 1920. He was right. https://en.wikipedia.org/wiki/Economic_calculation_problem https://en.wikipedia.org/wiki/Economic_calculation_problem
- trhway 2y agoA Soviet cartoon with similar story - a greedy customer wants a fur hat from a sheepskin, and he asks whether the hat tailor can make 2 hats from the same skin, and the tailor says sure he can ... that goes to 7 hats, and when the customer comes to receive the completed order he receives the 7 hats as ordered https://youtu.be/gSpjDi2BrQk?t=193 https://youtu.be/gSpjDi2BrQk?t=193
- Mikhail_Edoshin 2y agoThis is based on an old Russian tale, so the story itself is not specifically Soviet.
- huevosabio 2y agoThis is one of the reasons ML benchmarks are most useful soon after their creation. Once they become a target, they cease to meaningfully measure quality. The corollary for the Soviet shoe factory is you need incentives that propagate to guide production. You need the market to guide you in all the little details and you have to discover little by little what it is actually demanding. For ML, we need something similar if not the same.
- mempko 2y agoThe market is notorious for creating a lot of distortions. I don't think the answer is 'let the market guide you'. Externalities are a known but huge problem with markets as evidenced by the insane amount of pollution we produced.
- kmoser 2y agoWhen the market isn't demanding what you're supplying, call in the marketing and advertising departments to get your customers to value what you're producing, rather than acquiescing to your customers' demands.
- neilv 2y ago> Not to me confused with the Soviet shoe factories that produced only one type and orientation of shoe - with the other half of the pair being shipped in from 500 miles away. This reminded me of something our anti-counterfeiting startup learned when integrating into manufacturing for a high-end outdoor apparel brand. There are efficiencies that the factory gets by, say, parallelizing work on the sleeves of a jacket, while other parts are also worked on. But each batch of dyed outer material may have slight variation in color, no matter how hard they calibrate. So, their processes are designed to ensure that, when the jacket pieces come together, they all came from the same dyed batch of outer material. (There were many interesting tidbits like that, and those were just the ones relevant to us, in terms we could understand. I'm sure the factory also knew a million other things.) Probably the Soviet shoes of TFA had worse problems than slightly mismatched color.
- gmueckl 2y agoI remember my mum (tailor) telling me that even different sections of the same roll of cloth wouldn't match color precisely enough on many rolls they worked with. Colors are deceptively hard.
- neilv 2y agoInteresting. This factory might've also had to dealt with that degree of variation. IIRC (unless I'm thinking of a factory for a different customer), their processes include a per-unit container that moves through the production line, and the container starts with various materials that will go into that unit. So I guess that's one way they could ensure that all the outer fabric came from the same part of the same roll.
- Terr_ 2y agoI'm trying to remember the name of a manufacturing strategy, where different mildly-defective components are kept and combined to create a final product that still works because their physical or electrical flaws cancel out. I think I saw in the context of a company that made radios, and at the time (80s?) it didn't really work out for them.
- DrOctagon 2y agoSee also VO2 max
- layer8 2y agoTangentially, I think the mostly attribution-free discussion style of the C2 wiki has some merit. It's nice to read opinions and contributions on a topic without the cognitive noise of associated user accounts and reaction counts.
- ndileas 2y agoI do sometimes get confused when reading it, since the markers for main post, replies, etc are not super intuitive to me. Feels like a stereotype of a multiple personality disorder before you figure it out. Is there a guide for the markup somewhere?
- mig39 2y ago> All features as found on the specification are included, but the user interface is awkward. The vendor can claim, "we have all the features you need; thus, pick us." Describes every Enterprise software I've ever used.
- MobiusHorizons 2y agowith one key difference that the people doing procurement only have the spec sheet, and never actually use the software. They also frequently never actually interact with any of the humans that do use the software, and have formed an opinion that "those people only ever complain whatever we buy". So there is never any feedback cycle pushing the software to be better.
- bruce511 2y agoIt's a nice anecdotes, and maybe that works in some places, but in my experience selling to Enterprise, software quality is pretty low on their check list. Generally speaking, they're more concerned with the supplier than the product. Yes, it must (generally speaking) meet their requirements, but its also important that they -believe- the supplier can roll it out, and will be around in 10 years still supporting it. In other words Enterprise doesn't just want software. They want a stability of supply, so suddenly they're looking at things like Support levels, customability and so on. "You never get fired for buying IBM (a reference likely lost on you if you're a bit younger than me) wasn't about quality, but about longevity.
- nine_zeros 2y agoMy last company started stack ranking people on number of GitHub commits - as if each commit is equivalent and the only thing that mattered is the quantity. Soon enough, we started seeing lots of politics, cutthroat environment, management pressure, management meetings looking at dashboards of commits, stack ranks, PIPs and firings, but also a significant rise in the number of commits. One year later, commits metric won. But the business lost customers tired of buggy software. You got what you measure but quantity does not substitute quality.
- asdasdsddd 2y agoThis has been talked about endlessly so why don't we skip to the conclusion. To avoid the problem of gaming metrics you either need to 1. Spend a lot of time and thought into developing ungameable(whether this is possible is unclear) metrics and ways to measure these metrics. 2. Admit defeat and not be transparent with evaluations and/or go off of vibes.
- sdwr 2y ago3. Align incentives of the judges and the judged, reducing the pressure on metrics (ex. shared fate, belief in the cause, personal growth and fulfillment)
- falcor84 2y agoI don't think this is possible. In a sufficiently large organization, however much you try to prevent it, some employees will be "psychopaths" (going by Hintjens's definition) looking to game the system. Whatever the metrics are, they will put in only enough effort to advance their own interests, and assuming they succeed (and at least some will) at getting raises/promotions, the org is then at risk of (legitimate) legal action from other employees who put in more actual work and get lower compensation.
- asdasdsddd 2y agoIt's not even that there are pyschos, it's that incentives wane with scale because individuals have less control over outcomes.
- s1artibartfast 2y agoThat is still an alignment problem. Psychopaths can be good for the org, you just need better mapping of the game and reality.
- Spooky23 2y agoThis is the answer. The higher performance orgs I’ve worked for have had excellent incentive alignment and cohesion. The metrics were there, but fairly mediocre. Places with robust metrics ranged from excellent to meh. One place had a sales team that was owning it, and the leadership was shoveling cash into wheelbarrows. But the company was losing a fortune because the sales metrics were precisely stupid.
- amai 2y agoI can recommend the book Red Plenty, if you want to learn more about the successes and failures of Soviet economy: https://chris-said.io/2016/05/11/optimizing-things-in-the-ussr/ https://chris-said.io/2016/05/11/optimizing-things-in-the-us...
- _1tem 2y agoThis principle, as well as related principles, like the McNamara Fallacy and Goodhart's Law essentially boil down to one lesson I've come to realize in life: "numbers", "metrics" or even a "system" are never a substitute for actual humans caring about doing the right thing. If the humans involved care to do the right thing, they will do it, even without a system (although some systems make it easier). If they don't care about doing the right thing, no system or data-driven approach can fix that. Which is also why I have a sneaking suspicion that most economic theory is complete bullshit. All the debates over privatization vs. public services, monopoly vs. competition, autocratic vs. democratic styles of leadership etc. are mostly irrelevant. Both can work. It all boils down to whether you have good human stakeholders who have the integrity and agency to do the right thing. Counter to most economic theories, for example, a monopoly that is run by people who actually care about doing the right thing might be better run than fiercely competitive startups who just want to make a quick buck.
- s1artibartfast 2y ago>Which is also why I have a sneaking suspicion that most economic theory is complete bullshit. All the debates over privatization vs. public services, monopoly vs. competition, autocratic vs. democratic styles of leadership etc. are mostly irrelevant. Both can work. It all boils down to whether you have good human stakeholders who have the integrity and agency to do the right thing. I don't think this is some gotcha, but basic economic understanding for at least the last hundred years. Fundamentally, much of economic theory acknowledges these questions. This brings you full circle, given inconsistent humans with individual values, how do different systems and rulesets perform.
- pftg 2y agoThis reminds me of a brilliant Soviet satirical cartoon that illustrated the same principle with hats instead of shoes: https://youtu.be/gSpjDi2BrQk?si=CtJwQTHkm0HfNrxx https://youtu.be/gSpjDi2BrQk?si=CtJwQTHkm0HfNrxx
- shermantanktop 2y agoIt's like Rankin Bass meets Chekov.
- msarrel 2y agoIn Soviet Russia, shoe principles you