4 ms·
> this model arguably makes even more sense for knowledge-economy companies that require little in the way of physical capital, and derive the majority of their
by mason55 12y ago
> this model arguably makes even more sense for knowledge-economy companies that require little in the way of physical capital, and derive the majority of their value from the talents of skilled employees.
Which is why you still have partnerships in business that are 100% service driven - consulting, law firms, etc. Software falls in between because it requires knowledge capital but it does produce something of substance that can be sold and re-sold.
Also, in partnerships you're sharing ownership because you bring something irreplaceable to the table (generally your personal relationships). Front-line developers are usually replaceable as much as they like to think they aren't. Yes, they're more expensive than a factory line worker and you can't just code 40 hours a week and churn out product like a factory worker but you're not irreplaceable. You'll find that the people who AREN'T irreplaceable, either because of some industry or domain knowledge, can usually demand increased equity or profit sharing.
- ForHackernews 12y agoI'd argue that, with the possible exception of creative artists (authors, musicians, painters, etc.) there's no such thing as an "irreplaceable" worker. Even founders--there's plenty of companies that have been successful after replacing the founder with another CEO--sometimes even more successful, if an experienced executive takes over from a wet-behind-the-ears founder.
- mason55 12y agoYeah, irreplaceable is probably the wrong word. But in an industry where personal relationships are a huge part of the business and a single person can really have a large effect on the bottom line it makes sense to do something like a partnership. If I am personally bringing $5 million in bookings each year why would I stay at a firm that just pays me a salary when I could just go out on my own. Whereas as a programmer it's not quite as cut and dry. So the partners aren't irreplaceable I guess but their bookings have such a direct impact to the bottom line that the marginal value of them as a person is almost 100%.