economics – Page 4 – Sonya Ellen Mann

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Boss Life: Surviving My Own Small Business (Book Review)

Posted on August 16, 2015July 24, 2016 by Sonya Mann

Paul Downs, author of Boss Life and owner of Paul Downs Cabinetmakers — Paul Downs, author of *Boss Life* and owner of Paul Downs Cabinetmakers.

Running a small business can be brutal. With the publication of a new book, Boss Life, you don’t have to learn all the hard lessons on your own. Instead, read about the mistakes and occasional hard-won triumphs of Paul Downs, an old-school entrepreneur who describes himself thus: “I am a survivor, but not a financial success.”

This first-time author founded and manages the furniture company Paul Downs Cabinetmakers, which has been in business for twenty-nine years, since 1986. He also formerly wrote for The New York Times and happens to be my uncle.

Yes, I’m related to Paul Downs, but allow me to insist that I won’t be the only one who thinks Boss Life is great. Downs uses real numbers and anecdotes, some of which do not flatter his personal judgment, to illustrate the larger principles. His candor makes the book fascinating.

*Boss Life: Surviving My Own Small Business* by Paul Downs, published by Penguin’s Blue Rider Press.

Luckily Boss Life has almost nothing to do with woodworking, though that is nominally the content of Downs’ company. The book is really about sales. It’s about marketing and customer acquisition. It’s about cash flow, accounting, and management — basically, Boss Life is about economics and human nature.

Downs brings the reader through a year in the life of his company (specifically 2012), beginning each chapter by stating his bank account balance, the value of sales to date, and whether he’s lost money overall. Then he explains the month’s events and why they had the financial repercussions they did.

Part case study and part memoir, Downs’ book is worth reading if you employ people, are employed, or work in any capacity, no matter the size of your operation. That’s my review as a reader, not a niece.

A rosewood-and-ebony conference table designed and built by Paul Downs Cabinetmakers.

Basic Economics = Wondrous

Posted on July 21, 2015May 20, 2016 by Sonya Mann

“Revenue follows user attention, not the other way around; unlike money, there is a finite amount of minutes in the day, and a finite amount of users. To put it another way, attention is a zero sum game; every minute spent in Snapchat or LINE or WhatsApp is a minute not spent in Twitter or Facebook or Instagram.” — Ben Thompson on Stratechery

money whirlpool — Money vortex by Patrick Hoesly; tinted by me.

Scarcity is the key to economic value. If something is abundant and easily accessible, it’s not valuable. If something is limited and hard-to-get, it is valuable.

The concept of supply and demand — the relationship between the two forces — is so fascinating to me. Simple principle, but I keep turning it over in my head.

Supply and demand pressures come from asymmetry. From lack of balance. If Billy has more oranges than Sue, he has leverage, assuming Sue wants oranges. If Erica has more information than Rohan, she has a different kind of leverage, as long as Rohan is interested in her information.

Essentially, the key to business success is persuading someone to give you money for an object or a service. You have the thing or the skills. They have the money and desire.

Again, I know this is all very basic, but thinking it through makes my brain happy.

old-fashioned typewriter — Photo by Martina TR.

The Greek Tragedy: A Labyrinth of Debt — Abstract art based on the Greek debt crisis, by Carlos ZGZ.

Will Social Media Habits Transfer To Labor?

Posted on July 7, 2015 by Sonya Mann

Sam Biddle wrote for GQ, “When even our genuine friendships are being quantified, what hope can we possibly have for treating labor as more than a pack of pixels?” This is an obvious reference to Facebook and all the other social networks. Personal relationships are uploaded piece by piece — voluntarily, it’s worth noting — and then rigorously monetized.

road worker signs — Image via morgueFile.

We are eager to feed snapshots of daily life into websites or apps that promise to show our acquaintances. Soon we learn to rely on digital hearts and stars when defining our social value.

Biddle seems afraid that the same laissez-faire, click-happy attitude will apply to labor and transform the American job market. The evidence behind this notion is ample. Worry has spread so widely that I don’t feel like I need to substantiate with a link. But I do want to help tweak the argument’s focal angle.

Biddle touched on this topic again when he responded to a “gig economy” advertorial on Medium’s tech site Backchannel. The article, called “The Full-Time Job Is Dead”, was sponsored by Upwork, a middleman freelancer market created when Elance and oDesk merged. Biddle wrote, addressing the Upwork authors, “What you’ve described is a societal nightmare in which the only employment is deeply precarious, and only employers benefit.”

I don’t disagree. However, as far as I can tell, we are just seeing the repercussions of supply and demand. (Upwork still bears responsibility — like Biddle, I think their business is heinous.) There are more workers than jobs, so employers have leverage. It’s that simple, right? Of course the people hiring can do whatever they want. The only way to deal with the problem is regulation. (Or is there another solution that I’m unaware of?)

Alternatively, we could wait for the market to change on its own… which might not happen. Unless some bizarre disruption takes place.

Hat tip for the concepts: “Rebuilding the world technology destroyed” and the affiliated podcast.

Tech Is Only Awful Like People Are Awful

Posted on June 24, 2015May 20, 2016 by Sonya Mann

News-media analyst Ken Doctor wrote, “The web may have opened unbelievable frontiers of human thought and interaction, but it’s driven by the same business principles as all other enterprise.” Basically, the market is always the market. Self-interest is a perpetual motivator and supply-demand dynamics continue to exist.

The internet changes a lot, but it doesn’t change the fundamentals of economics. It changes the cost (or lack thereof) of some specific things, like distributing information, but it doesn’t change basic human behavior. It’s kind of ludicrous that anyone might expect it to.

DARPA's Warrior Web project may provide super-human enhancements — Photo via US Army RDECOM.

So here’s the point, which has been made before: Everything we don’t like about the implications of technology boils down to something we don’t like about the way humans organize ourselves. Because — to risk repetition — technology doesn’t change humanity; it simply enables us to express our persistent nature in new/different/tweaked ways.

For example, as Adam Elkus wrote on Slate, “Algorithms are impersonal, biased, emotionless, and opaque because bureaucracy and power are impersonal, emotionless, and opaque and often characterized by bias, groupthink, and automatic obedience to procedure.” An algorithm like the one that defines Facebook’s Newsfeed didn’t spring into being independent of people’s choices; it was constructed and enacted based on such choices.

Most consumers don’t know, think, or care about the value judgments being made by the engineers and programmers who design the functionality of apps, phones, thermostats, cars, etc. As long as a product gives us something pleasurable or useful, we brush aside collateral concerns. (Apathy toward data collection is a great example of this.)

Industries respond to what people — and aggregates of people — actually care about, which is expressed via money. As Adam Gopnik wrote in The New Yorker, “Markets are designed to make their own rationality. Where people put their cash reflects what they think and desire.”

Society is unjust because people are unjust, individually and collectively. We often don’t truly care about the things we claim are crucial, or the principles we tout as cherished values. (God save reporters’ salaries.) This is reflected in how humans make and use technology, just as it’s reflected in every other human endeavour. Susie Cagle’s series “The Crooked Valley” illustrates this (literally) very well.

Computers Can’t Take All The Jobs Without Ruining The Economy As We Know It

Posted on April 26, 2015January 8, 2016 by Sonya Mann

There’s been a lot of back-and-forth about computers making people’s jobs obsolete. Zeynep Tufekci writes in The New York Times, “Yes, the machines are getting smarter, and they’re coming for more and more jobs.” Okay, everybody panic.

scary computer — Illustration via opensource.com.

But wait—if a huge swathe of the people who formerly had disposable income are unemployed, it’ll wreak havoc on the economy. When people don’t have money to buy things/services, businesses will stop making things and providing services. Supply and demand, right?

Purely hypothetical example: Whole Foods lays off a logistics analyst because software does the job faster, cheaper, and possibly better. The unemployed analyst can’t afford to shop at Whole Foods anymore. Therefore Whole Foods has lost a customer because of its new software.

Picture this happening on a massive scale, and consider the cross-company effects. Laid-off analysts or middle managers — or whoever — also can’t afford Apple products, or fancy branded clothes, or [insert product purchased with disposable income, frivolous or not].

Am I missing something here? I feel like this is a big problem with the idea that computers are going to take all the jobs and we won’t figure out new occupations for people. If you have thoughts on this, please actually respond!

The Facebook comments are interesting, as is the thought my dad posted below.

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