The Factory vs. The Workshop

Who wasn't smart enough to know that Internet startups had to disappear sooner or later? We all thought the situation had gotten completely out of control, and we somehow wished the pull of gravity would get those highly egomanic startup captains of venture crashing to the same place from which they had soared.

No doubt a lot of the rise and fall of the dot.com era was inherently due to fundamental economic factors that hindsight so easily knows about. There must be a generation of Americans that thinking back smugly affirms: "I told you so!" For you and me that unlike them didn't know it was happening, their 401k is down just where yours and mine is.

Yet one question remains unanswered: if economics was so clearly predicting the end of the dot.coms, if it was so obvious that their business models were not worth the glossy paper on which they were printed - why did they exist?

The Factory and The Workshop

Let me start with a brief and boring theoretical digression. I want you to look at how we think of work. At how we have been thinking of work since the inception of time. Because there is a pattern there that smells of dot.coms and of stock options and of venture capital, even before there was money, or language, or even maybe consciousness.

Hunters and gatherers, let's start there.

Gathering is boring: you walk around, you look around, you pick up stuff. Hunting is fun: you run around, you chase and get chased, you have to create tools and weapons. Gathering is menial, anyone can do that. Hunting is creative, and only a good hunter is going to be able to survive. Bad hunters starve.

There you have it: smell startup? Ok, me neither. Yet.

Let's take the separation we had just above: menial and creative. In our minds, we associate a lot of things with work, and many of them can be placed on the polars that define menial and creative tasks:

  • boring vs. exciting - menial tasks are boring, which is bad. People don't want to perform them.
  • dependable vs. risky - creative tasks are sought after and depend on talent, it is likely that the competition will force you out of the field.
  • steady vs. divergent - if you succeed at a creative task, the reward will be factors higher than if you didn't, or even if you performed the menial task.

Of course, things are not just as black-and-white as described above, and gathering can be very exciting and creative, while hunting can be very boring (just consider your pals that stand for days at a time with a fishing rod in their hand...).

But what we get from this is that there is a choice involved. A more or less conscious choice as to whether we want to perform a task that is reliable and predictable, or if we want to risk for the rewards.

Artsy-fartsy

Ok, I am going to make a lot of enemies now, since the next point I am trying to bring home is that the nelly artist is closer to the macho hunter than the worker in the steel mill. The former lives a (granted nelly) life of starvation for passion (exciting) and the infinite reward of stardom (divergent). The latter is happy to cash a pay-check once a week and feed his family.

If you are still with me, we'll see the next big item in this list: if the economy is to be growing, it must change. This means the economy needs creativity, which in essence is the human power to change.

The stereotypical steel worker is not interested in change, since he is interested in steadiness. Someone else must be willing to go ahead, and if not strictly creative, that person needs to be a visionary.

The artist affects change by creating objects. That works well on a small scale, but soon reaches boundaries of growth. On the other hand, there is more and more manpower available for menial tasks that goes underutilized. We need a symbiosis.

The Factory

Some not so long time ago, a smart, creative person (read: artsy) came up with the equally smart idea to create a machine. That is a thing that does things without or with little human intervention. The machine allows for the creation of a lot of things that are very similar, all but identical. It transforms the menial task of yesteryear into an even more menial task that can be performed much faster. Where it took a day to create a decent steak knife, now you can get two dozen a dime on television.

This machine thing had one big downside - it required investment. Someone had to pay for the expensive thing in the first place, and then the expensive thing had to be put somewhere, and it usually needed food and drink and stroking care like an ancient goddess of sorts.

So someone, presumably after the invention of the machine, came up with the idea of creating a temple to house it. We call these temples 'factory' and send hundreds of millions of people to them every day to perform (what else?) menial tasks.

The factory now combines the two aspects of creative and menial in a congenial way: the work itself is completely menial, while the inception of the factory is creative. Bringing up the factory is the risk (monetary, for sure), the reward is the sale (which is typically in the factors of the risk) and the menial tasks performed in the factory allow a huge population to create goods they could not otherwise had available.

Capital

Back from our digression, we are again in the land of stock options and fancy titles. How?

Well, you see: the factory is the creation of a group of people that take the risk (the capitalists) and reap the rewards (the capitalists). The workers are there to be exploited, because that's what performing menial tasks is all about. No upside, just steady income.

The ugly side of the equation is that once you establish the factory system, the risk of the artist is not personal any more, but tied to the availability of money. To reap satisfactory reward, the creative person needs capital.

Oddly enough, there are people unlike you and me that actually have capital to spare and no real idea as to what to do with it. They want spectacular returns in exchange for something they don't need, and that's what we call venture capitalists. That's people that put money where their mouth isn't, to make it short. And they allow for the creation of factories without contributing any of the risk and creativeness involved in the process.

Dot.Coms

Back to the root. All of a sudden, towards the end of Nineties, there was a new, gigantic market that came open, with no barrier to entry. You didn't need millions or billions to open a web site and make money, and even a modest investment could land you infinite rewards. But you had to be creative and quick. You had to have hunting instincts.

Venture capital soon flocked. Billions were poured into the Internet, with companies trying to outdo each other in expenses, thinking that the highest investment would return the highest yield (which is a menial way of thinking if there ever was one).

And yet, despite all efforts, the small guys often outsmarted the big ones. Yahoo!, founded by two graduate students who to this day hold a large stake in the company, survived dozens of runners-up, because it was smart and creative and innovative in its approach. Competitors that spent billions did so in vain.

And so we have a host of solutions that failed because they didn't grasp the new medium, because they failed to innovate and differentiate, because they just weren't up to the task.

The Architect

Have you ever dealt with computer programmers? Then you know the reverence attached to the title 'architect' among them. The (computer programming) architect is the person that knows how to best translate a problem into a solution. That's the person you need if you have a smart idea for a product, but don't know how to make it real.

It is not by mere chance that the title coincides with the one odd man out in our culture. The (building) architect is the person that combines knowledge of art and science to create an object that is both pleasing and functional. And stable, of course, too.

The (computer) architect needs to perform similarly, combining knowledge of the trade (computers) and of the art (the functionality). Just like an architect takes the wishes and makes them a building, the computer architect takes the features desired and makes them a solution. In both cases the solution will comprise a variety of specialized choices, possibly made by others, to create an overall result.

The Factory and the Workshop

And here is where the cycle closes. The capitalist creates the factory because without capital, there is no factory. The architect creates the building for the capitalist, because without capital, there is no building. The computer architect needs no capital, and a well-designed architecture will be able to perform on small scales as well as on large scales, reducing the cost to the architect to a salary for the self and the minimal hardware required to run the software.

On the other hand, the menial element of the factory is missing, too. There are no machines that require constant supervision, there are no repetitive tasks to be performed - it is not the world of menial labor.

Computer programming, computer architecture, is a form of art. It may be very well the dullest form of art, but it is one, without any doubt. And you need an artist to create art.

To create computer architecture you need an artist's workshop, you don't need a factory.

Consequences

The current infrastructure of the Internet and of computer engineering as a whole is built around the capital paradigm. A group of people delivers capital to other people who have ideas. The former group creates a factory, and seeks workers to create the product. Workers get paid a fixed income, the proceeds of the factory go to the capital and in part to the instigators.

The classical paradigm is amended only in the heavy participation of the ideators to the financial rewards, and in the lesser participation of the workers. The former is handled by generous grants to founders and early backers, the latter in the form of stock options.

It must be stressed that both forms of rewarding are highly ineffective, since they simply modify the existing and unfit paradigm instead of adopting the correct one. Choosing a menial rewarding scheme where a creative one would be needed skews the results where it is most important, in the case of success and of failure.

Is it fair that the famous secretary of a successful Internet startup walks away with millions? Is it fair that the successful solution of an engineering challenge, of a product challenge receives no reward because of a failure of the sales team? Is it fair that a stock option grant may be worth millions of dollars on one day, nothing on the next, because of market fluctuations that are unrelated to the performance of the company and the employee?

In a workshop, the secretary gets paid a salary, where the artist starves until she or he breaks through. The reward and the risk are proportional to the impact on the team.

In a workshop, the extraordinary work of art that is marred by the unsuccessful marketing can move to a different gallery. The individual's contribution is clearly marked within the group and can move on its own.

In a workshop, finally, market conditions do not impact the success and rewards of the single person on a daily basis, but only as slow variables to which the individual can react.

Building Workshops

Haven't we all heard the story of the two brothers that sat down, programmed a Java applet, sold it to some big company and made millions on the sale?

That's the workshop in its rawest form. Take an idea, make it come true, and then sell it to someone large that can scale it up. Reap the rewards of the creative work and move the menial task to someone else.

It can't be stressed enough that the existence of factories in the computer world are a remnant of the old days when a computer cost millions of dollars and occupied a space that could house a factory or two. Back then, there was no choice, the capitalist model was the only one acceptable for computing.

Once the capital barrier fell, the world of computing quickly reorganized itself around workshops. We are just unable to see that yet. First, the open source movement brought a plethora of ready-made components out of which ideas could be assembled into reality at very low cost and in a very short time frame. Consider this the equivalent of artists learning from each other by just looking at each other's paintings or listening to each other's music.

Once this occurred, it was a matter of time for the first programming celebrities to come up. Linus Torvalds, Richard Stallman, even people like Marc Andreesen become stars because of their exceptional roles.

Currently, the balance of power is still shifted towards the factories. This is rapidly changing, with the largest factories realizing widely that they can survive only if they specialize in menial tasks. IBM and its success as a services company is the best illustration of this trend, the failure of all big UNIX companies demonstrates how the attempt to keep the creative world caught in the trap of stock options is doomed to fail.

But in the future, it will be the artist that steers the ship of development. It is hard to say whether the development will move: towards the pictorial scheme, where the industry is happy fabricating replicas of art works, but the artist has all of the scene; or towards the musical scheme, where the industry's promotion is instrumental in the success of the artist.

But in the end, it's the idea that counts, and it's the idea that will have to make the money.