
Value is created by doing - lpolovets
http://blog.samaltman.com/value-is-created-by-doing
======
natural219
All advice is a two-way street. I think at this point, the proverbial "advice
market" is saturated with this idea that "doing" is far superior to
"thinking". This is because, traditionally, hackers tend to lie squarely on
the "thinking too much" end of the spectrum.

I'm interested to read at least one post on the opposite advice -- what
happens when you're too heavy on the "doing" end of the spectrum? Are there
examples of startups failing because of too much emphasis of execution? At the
very least, the "ideas are nothing, execution is everything" meme is clearly
logically flawed. You can execute as fast as possible while creating zero
customer value.

~~~
DorintheFlora
I am of the opinion that "ideas are nothing, execution is everything" grows in
part out of the lack of adequate language and mental models to distinguish
amongst ideas of the _armchair politician_ variety and ideas with legs. There
are some words to distinguish such things, like hypothesis and theorem, but
they mostly don't apply in the realm of business. I have been trying to sort
out how to do a post on that very topic but I am not ready for it.

~~~
jorleif
That is very well put. I am often amazed what a big difference certain ideas
make it possible to build complex things quickly and with low amounts of bugs.
For example building a parsing subsystem "properly" as taught on compiler
courses vs haphazard combination of regexps. It is mentally much more
demanding, and requires more effort up front, but then to your surprise, every
change you make just works almost immediately, and there are no hairy corner
cases to resolve (this is kind of declarative vs imperative, but not quite).
Another example is mathematical models, such as Markov Models and the like,
where you can have a really complex behavior, but your parameters are simply
matrices and all operations are some sort of matrix algebra. Difficult to
understand at first, but very powerful and "clean" once you do.

In contrast, as you say, there are huge amounts of armchair ideas that are not
worth very much even if they are correct. For example "software will eat
everything" is something I believe is mostly right. It is also a business idea
with direct implications for action. Despite this, it is only valuable to set
the general direction (let's do software), but not any specific cases. It does
not mean that every case of transforming a traditional business into a
software one is going to be a grand success, or even profitable. In fact,
these types of ideas have a tendency to cause one to forget the exceptions
from the rule, and thereby being actively harmful.

~~~
DorintheFlora
Thanks to everyone who replied (or upvoted me). FYI, I am going to try to
start exploring these ideas here:

[http://dorintheflora.blogspot.com/](http://dorintheflora.blogspot.com/)

------
zoba
I agree, although this makes me think of the great number of people who have
the potential to create value but cannot, because their ability to "do" is
blocked. Most people I know who cannot create value have an issue of time.
Most everyone is locked into their job with rent payments, student loans, and
other debts. Its frustrating to see that those with wealth can also purchase
time for themselves to use to get more wealth, while the majority of people
are strapped in for the ride.

Of course non-wealthy people can build things in the evenings and weekends,
but, then they begin dealing with issues of stress and burnout. I'm glad YC
helps to give folks a chance. I do think one of the less talked about benefits
of a strong middle class and even wealth distribution is people have
time/ability to innovate on their own.

~~~
natural219
This is an incredibly important point. I think when people talk about
"universal basic income", the traditional narrative concerns the social
injustice of poverty, hunger, etc. For me, all I really want is the space to
work on the projects I care about and learn the skills to let me accomplish my
goals.

For now, it looks like I'm going to be working for a while to pay off my
student debt and save money before I can even dip my toes into working on
something interesting.

~~~
chii
I think the aristocratic wealthy (i.e., wealthy people who are wealthy because
they use their wealth to make more wealth, not create value themselves) have
created a societal structure where it's difficult to create a basic income
scheme, both politically and logistically.

The idea that people should be allowed to work on their own projects but is
funded by "others" (say, via taxes) is made to look like leeching off the
group. The benefits are, while still theoretical, never talked about.

The value i see in a BI scheme is that the natural geniuses of the world gets
to do what they are a genius at doing (e.g., somebody might be a really genius
teacher), instead of doing the thing that earns maximal amount of money. I
know somebody who is a great teacher, and he, at a great financial sacrifice,
quit his job to be a teacher instead. He raised so many good students, which
go on to bring priceless value to society, and yet the money he recieves is a
pittance. He would've made at least a 6 figure income easily, working less
hours had he remained in industry.

some people might call me a communist, but i really do believe they had some
good ideas about equality (just that i don't see a way of governing such that
corruption and inequality doesn't proliferate...).

Imagine a world where necessities of life is produced enmass by the
government, in such a way that the cost is so low as to allow it to be
provided to each citizen for free. Then BI would become possible. But i don't
see it comeing any time soon.

------
minimax
_Writing software no one wants does not create value—that’s called a class
project._

My corollary to that is that if you write software that does create value, it
doesn't matter what editor or language you use. So if you're super duper
productive in Perl (or whatever) don't worry too much about chasing after
whatever language HN is fetishizing at the moment. It will change in a few
months anyway.

~~~
discreteevent
A while ago I met an older friend for lunch. I used to work with him years ago
in my first job (failed startup). He was out on his own again building out an
innovative idea he had in Smalltalk, (which is what he knew). I was talking to
him about FP and type theory about all the debates that were going on about
it. He just said that its a waste of time listening to most of the people on
these kinds of sites because you can tell straight away that most of them
don't build anything. Of course that's not quite true, but there was enough
truth in it for me to feel like it was a friendly kick in the ass.

~~~
rpedela
FP? floating-point? functional programming? firepower?

~~~
AnimalMuppet
On this site, in this context? Functional programming.

------
theoh
Seriously, this _is_ the labor theory of value. Don't know why the other
comment to point this out is dead.
[http://en.wikipedia.org/wiki/Labor_theory_of_value](http://en.wikipedia.org/wiki/Labor_theory_of_value)

It's completely inadequate. See, for example
[http://www.ted.com/talks/rory_sutherland_life_lessons_from_a...](http://www.ted.com/talks/rory_sutherland_life_lessons_from_an_ad_man.html)

~~~
gboudrias
I've always been fascinated by people's propensity to write about things they
don't know, with the excuse that it's just humanistic sciences. There's a huge
body of work that's largely ignored on the Internet, because while the average
geek knows a lot about hard sciences, they're very ignorant on humanities
(maybe because it's not taken as seriously).

(As a side note, it's ironically hard to find out what this guy actually
_does_!)

~~~
zeidrich
The average geek doesn't know a lot about hard sciences. The average geek is
self taught and knows how to impress other people with scientific language.
Rarely do I run into "geeks" that make me think, "Wow, this guy could write a
novel paper on this". More often it's more a matter of "Wow, this guy knows
just enough to completely misunderstand the subject but speaks like he has all
the answers."

~~~
Crito
You should hang out with better geeks. Geeks that _do_ , instead of just talk.

~~~
themusicgod1
I do not think that you'll find geeks who _do_ without gaping holes in their
knowledge.

------
jmathai
I realize this is pointed out in the original post but it's important to state
for those of us who only read comments and headlines. The longer I do this the
more I believe that value isn't created by doing. It's created by selling.

As hackers and engineers the idea of "creating value by doing" resonates with
us. We're happy to hole up in a dark room and create. It feels great. Wish I
could do that for the rest of my life.

The reality is if you're selling something then that's the only validation you
should be looking at to know if you're creating value.

 _I say this from the perspective of starting up where the point is more
easily defined as creating direct economical value._

~~~
a-priori
_The longer I do this the more I believe that value isn 't created by doing.
It's created by selling._

You can't sell something that doesn't have value to the buyer. Therefore, if
someone buys a thing from you, it already had value before you sold it.

But don't get me wrong here, effective sales is an essential part of the
value-creation process. It's the other side of the coin. Like the old tree-in-
a-forest adage, if someone made a valuable thing and no one bought it, did it
really have value? It's hard to say.

Selling something may not create value, but it does _realize_ it: it
quantifies the value -- value that already existed -- and turns it into money.

~~~
jmathai
_Selling something may not create value, but it does realize it_

Well put. What we have to be careful of is being fooled into thinking we're
creating value if in the end that value can never be realized. Essentially,
not having value.

------
abiekatz
What work is for an investor and an entrepreneur are quite different.

As PG says entrepreneurs should "Live in the future, then build what’s
missing."

Investors allocate capital to what will be more valuable in the future:
whether it is something that is missing now or whether it is something that
will simply continue to grow in value.

Venture Capital is an interesting middle ground because not only do you
allocate capital but you also assist the companies in creating value and you
have to compete to be able to invest in the most promising companies. By
blogging well you are building your brand and this will help you meet great
entrepreneurs and increase your ability to have access to invest in their
companies. Of course your reputation will mainly be based on the track record
of your investments and how much you help the founders you work with but
writing well and having it consistently on top of hacker news helps.

Plus, your writing helps clarify your thoughts and provides you with useful
feedback which can help you refine your investment thesis.

Warren Buffett has said he spends 80% of his days reading and 20% talking on
the phone. He only has needed one good idea per year to be the best investor
of all time. His schedule doesn't sound like work to most people but it
clearly has worked well.

~~~
pa5tabear
I don't know much about his origins, but surely that's not how he used his
time when he was getting started, is it?

I'm guessing his work activities were far more conventional (though still well
selected) and only after building wealth did his time allocation change.

------
lquist
_Value gets created when a company does things like build widgets and sell
them to customers. As a rough guideline, it’s good to stay in roles where
you’re close to the doing.

It’s easier to sit around and talk about building a startup than it is to
actually start a startup. And it’s fun to talk about. But over time, the
difference between fun and fulfilling becomes clear. Doing things is really
hard—it’s why, for example, you can generally tell people what you’re working
on without NDAs, and most patents never matter. The value, and the difficulty,
comes from execution._

A corollary of this seems to be that investors (such as YC) provide little
value because they don't execute. This seems incorrect on its face; most YC
founders find the experience to be very beneficial. Maybe I'm missing your
point, Sam?

~~~
nswanberg
YC is itself a startup that produces startups, so its employees/partners are
certainly executing.

------
keithba
>> you should try to work on what you really care about

So Good They Can't Ignore You[1] calls this the Passion Hypothesis[2], and
argues (very well) that this is the wrong way to think about finding a career.

Instead, create a craftsman-like mentality and work ethic, and then use
deliberate practice to get very, very good skills. With great skills, you will
enjoy your work much more.

I believe this advice aligns with the rest of the blog entry very well.
Creating value (and doing it well) requires an advanced skill set.

[1] [http://www.amazon.com/Good-They-Cant-Ignore-
You/dp/145550912...](http://www.amazon.com/Good-They-Cant-Ignore-
You/dp/1455509124)

[2] This is an arguable point, since caring about something could be different
than being passionate about it.

------
tomasien
I was hoping there would be 0 comments on this - that would have been people
paying attention!

------
j_baker
You know, coffee and chat and conferences and whatnot are to the startup world
as meetings and hierarchy and process are to big companies. They're both
excuses not to get anything done.

------
mmsimanga
Trouble is not much publicity is given to the boring "doing" stuff that
successful people go through. We are shown the successful people having Q&A
sessions on Slashdot or being the keynote speaker at a conference. So you have
to constantly remind yourself that, it is the result of the work they put
before they "made it". So you need to put in your work. Thanks for this timely
reminder

------
Q_E_D
There seems to be an optimal mix between "work" eg:designing and "pseudo-work"
like having meetings to discuss ideas. Which of those activities will lead to
a better design is unclear, since much of the "deep thinking" which is the
basis of coming up with something original happens outside of consciously
focused thought eg: many writers only write 4 hours a day and do something
else the rest of the day, or the common belief that many problems are solved
in your sleep and "realized" in the shower.

So, lets not go in either direction for any one person; and let everyone
optimize towards their own mix of work and pseudo-work to come to their own
original ideas about X.

Some people will not have any original ideas and will therefore advocate work
as a method to "focus" on derivative outcomes that make money.

Other people will "find inspiration" while taking a bath and run out of the
bathroom to write down the genuinely valuable result and advise everyone to do
the same.

These two groups are very different and most of us are somewhere in between.

------
b1daly
Why does this truism get endlessly repeated? Is this news to anybody that if
you don't make something that people will pay for, your business won't make
money? In any case, it's so simple minded that I think it's wrong. It seems
obvious to me that a successful enterprise needs the whole system to work:
ideas (for a product), all the different kind of makers, sales, marketing,
legal, various managers. Or at least these tasks need to be done.

Seeing big companies with money to blow on a product that no one wants take it
all the way to market is sort of incredible to me.

Guess I'm just grumpy right now, but I sometimes feel like these posts are
jokes put out there by successful people to see if they can make non-
successful people feel stupid.

------
mindcrime
_If you can’t figure out to raise hundreds of millions of dollars, go work for
SpaceX (joining a great company is a much better plan than starting a mediocre
one)._

I love Altman's stuff, but I'm not so sure I agree with "joining a great
company is a much better plan than starting a mediocre one". Why? Because no
matter how great a company is, if you're an employee, you're still just an
employee. You have a "boss" (OK, maybe, just maybe Valve aside), somebody who
has you "under their thumb" and who can boss you around and redirect your
energy and time, and/or fire you at a whim. And it doesn't matter how great
your boss is, or how much you like him/her, you still _have_ "a boss". That
sucks. It sucks major donkey balls.

Well, it does for certain kinds of people anyway. It's a mindset thing. I
cannot stand having a "boss" in the traditional sense. I'd much rather be
running my own show, no matter how mediocre it is (assuming it gets at least
to the point of qualifying as a "lifestyle business" and I can pay myself
enough to pay the rent).

And yeah, yeah, I know that "you always have a boss" in a sense. Pedants don't
bother replying to this. I'm not talking in metaphorical senses or
generalities here. A Board of Directors, or "the market" or "your customers"
are your "boss" in a metaphorical sense, but that's not the same thing as
having one discrete person who can come into the room and go "Sooooo, Peter,
you DID get the memo about how we're putting the NEW cover sheets on the TPS
reports now, riiiiight? Yeeaaaaaaaaah" and yank your chain.

------
Patrick_Devine
I think there is a little bit of "black and white" fallacy happening here.
There isn't an "either/or" when it comes to an idea and executing. An idea
without execution is nothing, but executing without an idea is also nothing.
Successful people have an idea, and they execute.

------
jqm
I've never agreed with the idea that labor is the "sole" or even "primary",
source of value.

For example, I find nothing more valuable than clean air and water.

Off topic, but I believe this should be the basis for funding society rather
than appropriating a portion of people's productive labor.

Land is valuable. But you don't really "own" it because no one made it.
Likewise the Aluminum in a can or the steel in your car. You just borrow them
for a time. When we are all dead and gone these things will still be here and
people will likely use them.

Society should charge for the use of what really belongs to everyone instead
of this part time modern indentured servant hood called payroll taxes. It
seems much more just.

As a side benefit... consumption is discouraged and production rewarded. What
better for society than that?

~~~
chii
> consumption is discouraged and production rewarded.

how can this both be true? if consumption is discouraged, then what would be
the reward for production? if it is something that is to be consumed, then by
definition consumption is desirable. If the reward is not something that is
consumed, the what is that reward?

~~~
jqm
I'm not sure I understand your point. Or maybe you don't understand mine.

Mine is that one should be taxed on the use of land and materials (which, from
a larger perspective, belong to society and humankind as a whole) rather than
on innovation and labor (which is, from a larger perspective, a form of theft
and slavery).

By taxing like this, you reward innovation and production while discouraging
wanton consumption of resources (leading to more efficient use of resources
and more investment in innovation).

------
beersigns
This was a pretty thought provoking read for me; it put into words some of the
beliefs I have operated by. However it's also important to remember that to be
'doing' you need to have a clear picture of why you're doing what you're
doing. A lot of people I've met(and myself at times) do not know what they
want to do; they've only learned about things they don't want to do in their
experiences. I do agree it's best to gravitate towards projects that truly
interest you though; if you don't believe in what you're doing you risk
drifting into complacency.

------
codingtheone
I feel there are two kinds of people, those who have the ability to sit down
and talk about things without feeling the guilt of not doing it and those who
feel I posters for just talking all the time. There are people I know who are
talking about the same ideas for more than a decade without doing anything
about it, yet they can come back the next day and talk with all the excitement
and ambition in the world as if they're oblivious to the fact that they won't
do squat about it

------
erikpukinskis
The fact that the notion that "we need to go to space" is a foregone
conclusion at the dinner parties this person goes to is exactly the reason I
avoid San Francisco.

------
CapitalistCartr
In business, money is how we keep score. Like in a game, the score doesn't
lie. i do not mean to imply that money is the ultimate why: money is rarely
why we do what we do. But in this game of business, it is the score.

If you're not making money by doing it, its a hobby. There is nothing wrong
with hobbies, but they aren't business. Want to know if you are heading in the
right direction? Are you headed towards money positive? That's your answer.

~~~
commanda
I don't believe money is 1:1 with value. Consider for example a "Craigslist
Flipper" \- someone who finds items for sale on Craigslist, buys them, and
turns around and sells them for a profit. Did this person create value? Not at
all; I would argue they created negative wealth in the world. See also: people
who run window installation companies and go around breaking people's windows
at night.

~~~
sireat
I agree with you on the breaking windows guy but not with the Craigslist
Flipper in the pure form(just buy and sell locally with no shipping or
repairing which would add value besides flipping).

Why does the Craiglist Flipper add value? The Flipper takes away the random
luck factor and distributes goods to those who can best utilize them.

Consider an iPad 1 listed for $10 on Craigslist by someone who just wants it
gone. Almost anyone would buy just for the heck of it and take it away from
the market even if they already have iPad Air and 3 other Android tablets
gathering dust at home.

However, if the Flipper buys it and puts it back on the market at say $100,
the person buying from the Flipper will actually have to think before making
such a purchase.

So a reasonable Flipper adds liquidity and stability to the market.
Unreasonable Flipper (one either putting prices too high or too low) does not
stay in business for too long.

------
commanda
This definition of value ignores ancillary departments such as marketing,
office management, HR, and legal. These are sometimes known as "cost centers"
in a business organization, but in that they support the
engineers/artists/makers, they most definitely are creating value. Sometimes
the chain can be long, but it's usually present.

------
cynusx
I have not have noticed that Sam Altman was bad at writing, most of the posts
that made it to HN are pretty solid. :)

------
iterable
Couldn't agree with you more. And I think the effervescence of the Silicon
Valley tech scene creates tons of events, roles and initiatives that are a
complete waste of time (For example: some meetups, happy hours and incubators
of incubators of incubators). The value is created by making and selling
things!

------
flyosity
This reminds me of when I see friends in the industry go mostly radio silent
for weeks on Twitter or Facebook, only posting once or twice in a timespan
they used to post 20 times or more. It usually means they're busy _doing_ and
that I need to get busy _doing_ as well, not surfing and reading.

------
arithma
It was quite surreal reading this article right after reading Betrand Russel's
"In Praise of Idleness." But I agree with the author, the worst idlers are the
ones who think are working.

[http://www.zpub.com/notes/idle.html](http://www.zpub.com/notes/idle.html)

------
toddh
Value is never created, it is a human construct assigned by humans to
something for a variety of reasons. It isn't tied to work or any type of
currency. So "commenting on HN, tweeting, reading about other companies" can
indeed have value if humans deem it having a value.

------
beat
A minor quibble here... while value is created by doing, value doesn't
necessarily reflect in something that can be sold to other people for money.

"Writing software no one wants" can create value if the person writing it
wants it. Just not monetary value.

------
ForHackernews
> As a rough guideline, it’s good to stay in roles where you’re close to the
> doing.

Why? It seems to me like the further you are from the doing, the more likely
your role is to be prestigious and highly paid.

~~~
dclara
It sounds so true. The it's the other way round. They have the prestige to
talk and if you don't, you have to do it. At the end of the day, no doing, no
talking. As a startup, we have to do both.

------
rhizome
OT: can someone explain why some bloggers do not include (or as here,
minimize) the date of writing the post? It strikes me as a conceit that their
writing will remain timeless.

------
sarojt
I dont really agree with this, there is always value in mentoring the creators
rather than being a creator yourself.

------
izietto
At first I read " _Valve_ is created by doing" :-$

------
ffrryuu
But the Fed can just prints money and out compete you.

------
film42
Value is created by caring.

~~~
ctdonath
Caring isn't if you don't do something about it.

------
jason_wang
set noprocrast = yes;

------
mkramlich
> Another example of not-quite-work is every night in San Francisco, there are
> dinner parties where people get together and talk about the future. It’s
> always fun and usually not very contentious—most people agree we need to go
> to space, for example. But at the end of it, everyone goes home and works on
> something else.

except for Elon Musk and team at SpaceX

