Subject: Re: Successful FSBs
From: "Stephen J. Turnbull" <>
Date: Sat, 21 Sep 2002 01:30:56 +0900

>>>>> "Lynn" == Lynn Winebarger <> writes:

    Lynn>      That measure of wealth fails to count whatever values
    Lynn> the owner is exercising (not sure what the correct wording
    Lynn> is, referring to your response to Kragen).

Yes.  Deliberately so.

    Lynn> But don't economists take the fact that they are not taking
    Lynn> the potential wealth as a measure of economic value in and
    Lynn> of itself (i.e. >= the potential wealth)?

Yes, they do.

In the economist's idealized world (== the one that we can build
analytical "general equilibrium" models for), everything can be bought
on markets.  So there is no good reason not to run "pure" businesses
which maximize wealth.  We (well, "I"---and all right-thinking
economists :-) take this as a benchmark against which to measure
success, not as the measure of success itself.  Because in the real
world, "money can't buy me love," or software freedom, either, money
alone is not a sufficient statistic.

But I think that that is a reasonable benchmark to use to define
"lifestyle business", as one which increases value to owners by
deliberately deviating significantly[1] from wealth maximization.
This (by definition, but I still think it is the "right" definition)
is not going to appeal to VCs and other "non-family" investors.

    Lynn>      I don't know how you plan to impose McD-style quality
    Lynn> control on programmers period.  See Fred Brooks.


    Lynn> It seems to me there's leverage there (at least for those
    Lynn> 10x more productive ones).

I don't understand.  It seems to me that "be a star programmer" is not
really a business model.  Sure, on average the stars will be richer,
whether they take that in financial or non-financial form.  But that's
always true, and is perhaps more certain if you draw a salary instead
of running a business.

[1]  My argument to Adam Turoff about Ghostscript is precisely that
it's not clear to me that Aladdin deviated "significantly" from
financial wealth maximization.

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