Comment by spaghetti | Hacker News Reader

Comment by spaghetti | Hacker News Reader

I enjoyed this article. The emphasis on firing someone and still being friends or peers is a nice separation between business and relating to other people.

I'm curious about employer/business owner and worker relationships going forward. There's major downsides to full-time employees: it's difficult to hire someone that's skilled and gets along with others and firing a full-time employee is not a pleasant experience for anyone. There's also additional overhead associated with benefits and hr departments.

The modern tech ecosystem has eliminated much of my need to hire other full-time employees. Github takes care of version control. Mixpanel takes care of analytics. Even Airbnb simplifies traveling to the extent that I don't need any help. I can just pay contractors and freelancers for the work where I do require help.

The point is that full-time employees are looking less and less attractive to someone like me who's starting a new company. The path of least resistance is to just adjust my business structure or model to minimize the number of full-time employees I might need in the future.

There are certainly upsides to having full-time employees. And many companies require them. I think the extent to which I'm avoiding full-time employees long-term is interesting. I doubt I'm the only person considering this. So I'm curious how the employer/business owner and worker relationships will change in the next decade or so.

Another model which already exists today is the 'Hollywood model'. People will get together, create a movie and then disband once the movie is done.

In 'the nature of the firm'[0] Donald Coase asked himself why there are businesses with employees at all when an entrepreneur could instead contract the work, a la Hollywood model. The ultimate answer is that the transaction cost of having to go to a market every time you need to get something done outweighs the inefficiencies of having employees. He got the Nobel prize for that.

I got acquainted of those notions trough the book 'Here 'Comes Everybody' [1]. It talks about the way the internet reduce transaction costs and allow new forms of sharing and collaboration that weren't possible before.

[0] http://en.wikipedia.org/wiki/Ronald_Coase#The_Nature_of_the_...

[1] http://en.wikipedia.org/wiki/Here_Comes_Everybody

"The ultimate answer is that the transaction cost of having to go to a market every time you need to get something done outweighs the inefficiencies of having employees."

Definitely an interesting idea. I wonder how it varies across different businesses? Also I wonder if it will be as true in ten years as it is today?

The point is that full-time employees are looking less and less attractive to someone like me who's starting a new company. The path of least resistance is to just adjust my business structure or model to minimize the number of full-time employees I might need in the future.

I don't know if this is generally true. But it's something it's a behaviour I noticed in myself, and others, over the years.

People starting their first company don't like hiring full time employees. They see a lot of extra responsibility - and a loss of control that they get from working with contractors.

People starting their Nth company positively look forward to the time they can hire full time employees. They realise that they can't control or manage everything themselves, and the quicker they can move from being the keystone that holds everything together the better it's going to be for the long term survival of the organisation.

My outlook will probably change over time. However I wonder if the software development ecosystem will change at a faster rate? Someone in 1998 who looked forward to hiring employees probably has a different outlook today given the availability of, say, Amazon Web Services.

What's interesting to me is how much things have changed in the last 10-15 years and how much they could change in the next 10-15 years.

There seems to be a inflection point where the company gets big enough where working with contractors becomes more beneficial again.

Whether this is to be flexible around seasonal demand or scaling up for particular projects, this can avoid long term costs involved having full-time employees. I've seen that larger organisations are far more willing to bear the short-term costs of flexibility than smaller ones.

Sure, if you're in a transaction-oriented business where it's simple enough to keep the business in your head, you don't need employees.

As things grow, the problem with contractors is that their stake is limited to their contract. Good employees have the best interest of the company in mind.

Interesting point about good employees actually having the best interests of the company in mind. I hope that employer/employee relationships move in this direction as much as possible.

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