Hacker News Reader

Comment by jasonkester | Hacker News Reader

One way to work this is to have the person who replaces you be "you, but only a few hours a week".

That is, automate your business to the point that it takes substantially less than one full time person to run it. Kill off all manual recurring tasks, automate all the common customer service interaction, get the infrastructure ticking away so that it stops routinely blowing up on you. Get things down to just a handful of customer emails that actually need a human response, then book that flight to Ibiza.

They have wifi, I imagine. Run your business over coffee in the morning, then go off and live your life.

View on HN

(preemptive) response:

Indeed during the recent dotcom mania a bunch of quack business writers suggested that the company of the future would be totally virtual -- just a trendy couple sipping Chardonnay in their living room outsourcing everything. What these hyperventilating "visionaries" overlooked is that the market pays for value added. Two yuppies in a living room buying an e-commerce engine from company A and selling merchandise made by company B and warehoused and shipped by company C, with customer service from company D, isn't honestly adding much value. In fact, if you've ever had to outsource a critical business function, you realize that outsourcing is hell

http://www.joelonsoftware.com/articles/fog0000000007.html

To make peace I would suggest that, this approach is perhaps doable at a smallish scale by eccentric individuals, but not on a wider scale. The proverbial $25k p/m T shirt business.

Keep in mind that Joel was talking about a business with zero value added by the founders. For a SaaS business, 100% of the value is added by the software written by the founders.

If it's worth $50/month to the customer when manned by a guy doing a thousand tasks by hand and answering every email that comes in within 10 minutes, it's still worth $50/month to that customer once that guy gets organized.

But you're right, you probably won't earn much more than $25,000 per month for that half day's effort. Really puts a crimp in my yacht buying budget, that does.

Indeed, you are relying on the inefficiencies of the market you are currently operating in. If you find a niche where that works, milk it while it last, but any serious competition will remove the middleman.

There is however a value added that can be overlooked: cashflow. If you have enough cash to smooth the various money transfer between client and provider A,B,C,D that may be enough to keep you in business.

I thought of selling some product on Amazon that makes you a shitload of money initially and has massive margins and a big market (for example, wool) but Amazon will destroy you ASAP.

I've listened to a podcast or two by people whose full-time job is, essentially, Walmart-to-Amazon arbitrage. (Hit up every big box store in your town twice a week for items which your noggin and Amazon app suggest are currently substantially more dear on Amazon than they are at the store; clear the shelves at the store if you find any; ship to Amazon and have them do fulfillment; buy more inventory when the money comes back.)

It feels to me like it's one of those things that shouldn't work in a world with perfectly efficient pricing and spherical cows but apparently it does actually support a handful of people in the real world.

Link for substantiation: http://www.smartpassiveincome.com/fulfillment-by-amazon-fba/

Same topic, different podcast:

http://www.npr.org/sections/money/2015/06/03/411777635/episo...

It's pretty interesting. We work with many of these folks, who are buying discounted gift cards to save even more on the purchasing side. Seems to be working very well for some folks.

To be fair, in those models that assume "perfectly efficient pricing" this would not be considered arbitrage because of the obvious inventory risk and cash flow implications.

In models that don't assume perfect efficiency this economic activity is the driver of the pricing parity. That is, the market is efficient because there are very good & usually professional businesses that drive these differences in price away.

Arbitrage specialists continue to this day when you'd think every pricing disparity has been dealt with. But they keep finding more.

I don't think there will ever be a day when there is not arbitrage opportunities to be exploited.

In any case arbitrage specialists are adding value by eliminating pricing discrepancies and clearing the market. It's a legitimate practice and you get paid for your smarts and risk.

This is the thesis of "The Four Hour Workweek": http://fourhourworkweek.com/

The main takeaway from "The Four Hour Workweek" is that if you manage to sell enough copies of a book outlining how to live off a 4 hour work week, then you can live off a 4 hour work week.

This assumes the company has no employees, right?

As an employee, why should I bust my ass working all day if you're just going to answer a few emails over coffee and that's it?

Because those few emails might bring in more customers which might bring you a bigger paycheck.

So? That's not a reason for me to bust my ass. You're not gonna get anyone going the extra mile by doing that.

I'll put it in a less charitable way - because those few e-mails are probably worth more to the company that a month of your work.

I find those "The Dog in the Manger" assertions weird. Most businesses are started by people wanting to make big money - often to secure not only themselves, but their families and causes they care about. Can't blame them, because frankly, even 8h of work week most of us are trapped in seems like a ridiculous waste of life. So the system promises them more money for less effort if they shoulder the risks and initially work their asses off to build a business. They do so, and now we should renege on the promise? Sounds like a great idea if you want to ensure the next people decide not to bother starting anything.

How hard you see the owner working shouldn't be the primary motivation for you to work hard. There are other levers (dollar compensation, equity allocation, promotion opportunities) that should fill that role instead.

Generally, you don't work directly for a 4HWW type company. These types generally always hire contractors and choose their products so that they have enough margin to be able to afford them over employees.

The real risk of doing it this way is your market slipping away from you while you're on the beach checking out. Of course, you can always book a flight home and build a new muse once this one peters out, but the high margins that allow you to automate will run out eventually.

Because it's your job and you're being compensated to do so. If the company is running fine without the owner, and his/her being away isn't negatively affecting your own ability to do your job, then why does it matter to you what they up to at any given moment?

because you're presumably being paid as well or better as you would be to do the same job for another company? if that were the case, i wouldn't really care what the person paying my salary was doing with his or her life.

This is exactly what I want to do eventually

Reply on news.ycombinator.com