Comment by jdavid | Hacker News Reader

Comment by jdavid | Hacker News Reader

I think this is proven at companies like Google, and Nintendo.

If you divide total revenue of the company amongst all of its employees, Google still makes say 1-2M per employee, and Nintendo has been reported to earn in revenue 2-3M per employee during the heyday of the Wii.

The key to making this work though is being able to have a product market fit. Or in the HN religion, 'make things people want'.

Secondly I think there are a great number of inefficiencies that can occur if say a product could earn you $3M per engineer/ hacker and you are able to get at-least $40k per engineer/ hacker, as you work to narrow that delta you will refine your nitch, and craft.

If however the revenue does not scale, meaning, it's not easy enough to grab something for your poor/ unskilled efforts, I think it's hard to wiggle your way to the top and reach $3M per person.

I think this is why HN/ VCs tends to fund people in strong existing markets which are begging for an update.

It's too expensive to educate someone on your value, and to build the market, even though there are some entrepreneurs that are really good at that.

  > your nitch

Pet peeve: It's "niche." In spite of how it's commonly pronounced.

My peeve is the pronunciation 'nitch'. It's pronounced neesh, it's a French word.

According to Merriam Webster, the primary pronunciation is "nich"...

http://www.merriam-webster.com/dictionary/niche

Just because a word has a French origin, doesn't mean the French pronunciation is preferred in English.

Since we're nitpicking, that should be (US) English. In the UK we say neesh. Or at least, I do :)

Indeed. According to the Internet (which is always reliable): "There are two common British pronunciations, [neesh] and [nitch], the first perhaps being more highly regarded. The US pronunciation is always [nitch]."

Source: http://www.talktalk.co.uk/reference/dictionaries/english/dat...

Tell that to Home Depot or Notre Dame..

Your numbers for Google seem to be good, but I think it's more important to look at the profit, rather than the revenue.

http://www.wolframalpha.com/input/?i=google+revenue+%2F+goog...

http://www.wolframalpha.com/input/?i=google+profit+%2F+googl...

Neither profit nor revenue is the number you want.

Revenue = total corporate income. Profit = revenue minus costs, with costs including compensation.

For the social justice analysis, focusing on "How much money is available for employees and shareholders?", you want revenue minus costs excluding compensation. Costs to buy materials (except in the rare case the company overpays because the vendor is the CEO's brother) are generally fixed and therefore not part of the analysis; overpaid executives are.

For the record, most of the criminality in corporate capitalism is not based on profit but on executive markup. If a company's only crime is making "too much" profit, then the solution is to buy their damn stock. (No, I'm not an HN libertarian. I'm a socialist, but also a realist.)

I thought I was a capitalist growing up, but these days I think my political affiliation is more likely just 'hacker'.

Anyways, as thought experiments, I have been toying with the idea of limiting company size to 150 people, based on dunbar's number, which would guarantee distributed ownership and accountability. By keeping group size small i think it's harder to cheat and waste social capitol.

And secondly, I have been thinking of requiring companies to distribute a certain percentage of revenue to employees for a tax break. Since 60+% of federal income is via earned income, it makes sense for the government to encourage this sort of income anyways. I also think this might align executive interest with their employees and help us make earned income more attractive. I am not really sure it's fair that capital income, like dividends and sale of property should be flat taxed at 15-20%, while hard working people are effectively taxed at 30-60%. ( don't forget about the employment/ SS tax which your employer pays, or in the case of a consultant they pay entirely. )

Per-employee earnings may make sense as an indicator of the health of a company but they do not mean much in this context because without the collective team, the earning per employee may be impossible to achieve.

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