Profit, Lies, Theft, and Idiocy
February 4, 2011
To some degree I have long found fault with certain naïve notions of commerce popular among some members of the design community. I try not to dwell on this stuff since anecdotal cases are just that. Of late, however, the positive buzz about compellingly-misguided commercial theory and experimentation, specifically within the design community, has caused me deep concern about the prospects and wellbeing of my peers.
As a student of history, economics, psychology, and a 20-year businessman, I know a few things about how human commerce does and does not work well. In an effort to ward off widespread indulgence in bad business, I want to help educate and offer some advice to my peers.
First, you need to understand some fundamental facts…
Like everyone in a free enterprise system, designers work for profit. We freely trade our sovereign value for the sovereign property of our clients. In doing so, we profit from the exchange just as our clients profit from the exchange. This voluntary arrangement of natural order is unique in that it creates wealth in a rampant and moral fashion; without theft, without destruction of value, without harm, and without the violence of compulsion. As a moral and socioeconomic system, this is known as Capitalism.
This free and voluntary exchange has various formats, but it typically takes one of two forms:
1. Where a professional agrees to perform services for a client in exchange for fees that the client agrees to pay.
In such cases the service is not, at the moment of mutual agreement, a tangible good. Therefore, in the absence of tangible goods the client’s agreement to pay is based on 1) the professional’s reputation and/or some other compelling assurance that the result will be agreeable AND 2) contractual conditions that the service will take into account the client’s expressed desires and/or other contextual constraints that will help shape the services rendered by the professional. In a professional context, both conditions are required.
Or
2. Where a merchant and customer agree on a price the customer will pay for the merchant’s tangible product.
In this sort of relationship, the customer’s agreement to pay the price set by the merchant (or otherwise mutually agreed upon) is based on the customer’s direct inspection and appraisal of the product’s value.
* * *
It is important to note that these two models cannot be successfully mixed, else calamity and destruction ensues.
Now, in both scenarios, though the buyer and the seller each trades away his sovereign property and/or value, each also profits from the exchange. Furthermore, as the relationship and the exchanges are entirely voluntary and mutually agreeable, nothing and no person is harmed by it. On the contrary; since virtually every individual has the capacity to participate in both sides of either of these sorts of relationships, the result of a population’s activity is ever-growing wealth for all involved…according to each individual’s choice for his level of participation. Note, however, that if theft or destruction/denial of sovereign value or any force of compulsion is imposed upon this system, it breaks; often with terrible and inequitable results.
Despite these clear facts and all of human history to support them, many people are seemingly compelled to corrupt and destroy the morality and natural order of this fundamental human relationship. When this happens, the mutual profit it produces is also corrupted and destroyed.
The most common form of commercial corruption stems from denial of the sovereign value of genius or property. Based on collectivist ideology or simply naiveté, some people believe that someone’s genius and/or property has no innate value so, therefore, requiring something of value in exchange for it is either greed or theft. This highly-destructive belief (or more often, feeling) leads to some misguided ideas and practices, which we’ll examine next. It also leads to catastrophic and unnecessary human suffering…but that is a topic best left to another article.
So armed with the misguided notion that others already fully or partially own your genius and property you’re apt to make mistakes in commerce; like inviting a crowd to determine the proper dissemination of it. The colloquial term for this is “selling out.”
How to become a sellout before you even make anything
Selling out is the derogatory term used to describe the act of letting go of your sovereign genius or property (your enterprise) and seeking to profit from the act, but with diminished or non-existent control over it.
Recently, one high-profile example of the execution of a daring new business model that facilitates selling out piqued interests and conspicuously turned heads. This example has been hailed from every corner of the design industry and has lead to the positive reinforcement of two problematic and destructive notions. Specifically: 1) that mixing professional and merchant commerce models works, and 2) that selling out is an appropriate springboard toward excellence and mutual satisfaction. Both of these notions are false. Therefore, this example is doubly misguided and corrupted.
Example:
The Shape of Design project on Kickstarter
By taking the professional-to-client approach for what should be a merchant-to-customer context, Mr. Chimero has abdicated ownership of his idea/genius and the results that will come of it. Having bought and paid for it, the collective investors now own his genius in this project. By selling out first before he created the product he promises, he’s now working for the investors instead of working for himself.
The investors paid their price before any possibility of seeing the actual product. What if the results don’t meet the investors’ expectations? They’re likely to be upset, and rightly so. And the onus will remain upon Mr. Chimero to satisfy them; else he fails to be an honest broker. Knowing this and perhaps concerned with the faulty arrangement, the collective investors are well within their rights to direct Mr. Chimero’s efforts. After all, they own the result now. His genius is already bought and paid for. Sellout.
If only he had created his work based on his own ideas and standards. Given that Mr.Chimero actually does have a clear idea and purpose and surely the skill to execute his genius in the production of what he firmly believes will be a valuable product—according to his own standards—why didn’t he simply do what he knows is right and then ask for voluntary payment later? The answer is perhaps revealed in his third visible blunder in this scenario.
Yes, if the first two mistakes were not enough, our intrepid hero has made a third. He goes on to conclude his Kickstarter project listing with an unfortunate, feeble, and destructive explanation of how he’ll used the investment ponied up by his new investors:
By this final entry on his page, he clearly acknowledges that his genius has no value whatsoever. He clearly feels compelled to put the kibosh on any notion that he will actually profit from his sellout-based project. Allocating all profit elsewhere and only a small bit of cash set aside to make him feel safe… in effect he says, “Don’t worry! I’m not going to take too much of this money for myself! That would be indecent and you might be angry at me…’cuz profit is evil! So trust me, I’ll be sure to leave as much profit as I can on the table. I’m just happy to selflessly serve you! It’s your world, boss!”
Excrement. C’mon, man; apologizing for and mis-justifying rightful profit from voluntary exchange? Really? This is collectivist morality in all of its immoral and destructive force. Reject this notion! Every individual is entitled to every bit of profit he can realize from his genius and property, and notions to the contrary deny sovereign human value and crush the human spirit.
“We have to pass the bill so you can
find out what is in it.”
In the spirit of Nancy Pelosi’s criminal justification for passing economy-crushing bills without reading them, Ryan Carson over at Think Vitamin thought this troubling scenario was a capital idea. In his article, The Game Just Completely Changed, he goes on to say this:
* * *
What about Developers?
I also believe there’s an exciting opportunity for Developers here as well. Imagine this scenario…
You spot a much needed tool or service. A new framework, iPhone app, plug-in, etc. You decide you can create an awesome solution and you can dedicate a couple months to building something awesome. You create the project on Kickstarter and everyone who funds you gets a copy of the app/software/etc and a few exclusive goodies. [sic]
* * *
Sure! Because enormous-committee-clients are what make projects wildly successful! Let’s completely forget how the two different commerce models work, and why…and let’s forget why selling out and relinquishing any ownership of what you merely aspire to do is grossly stupid and soul-crushing. Yay!
And here's an example of what this thoughtless frenzy produces…
Yes, by all means let's remove the business from business. We'll all be safer and more equal then. Yay!
What’s happening in this collective community gasp of fascination is what you get when commercial naiveté, economic ignorance, and collectivist ideology collide in a spectacular display of idiocy. The really sad part is that too many otherwise-astute designers, developers, and entrepreneurs are latching onto this idiocy without seemingly a moment’s reflection or even a cursory examination of the logical conclusions of the suggested theory.
Don’t be a professional idiot…or a thief
As you’re an intelligent person, you must surely understand that your genius, your work, and the products they eventuate all have value; value that you alone own until you bargain with someone to trade them for mutually-agreeable profit. And don’t get distracted by the critical ideas wrongfully associated with the term, profit.
Everyone profits from everything they own. You spend money on toothpaste and you profit greatly from that purchase (clean, healthy teeth, fresh breath…). You buy gasoline and you profit greatly in exchange for trading your money to oil companies (you get to drive to work, to school, to the store, to travel, etc…and profit more from these things). Everything you trade your hard-earned money for brings you profit; often immeasurable profit. So don’t deny the sovereign value of those you trade with and don’t destroy the necessary models for doing so.
Denying your own or someone else’s inherent value makes it quite easy for you to become a thief. Ignoring sovereign value or rights makes every instance of profitable exchange around you seem like theft, so you may then decry or demonize it. This notion, however, makes you the thief, as you then directly or indirectly sanction and corrupt free enterprise in service to a destructive ideology.
Yes, sadly there are some people who simply cannot tolerate the idea that profit can be realized from free exchange. Moreover, when a profitable relationship is fueled by widespread appreciation and desire for the exceptional quality or effectiveness of the exchange and it becomes great profit (hello Microsoft, ExxonMobil…), immoral and intellectually-stunted people regard the result as nothing less than great evil. Such people are known as Marxists, socialists, progressivists, communists, or simply by the generic term: collectivists.
It is not my purpose here to delve into an examination of these facets of societal philosophy, but it is important that you note the logical conclusions of the naïve notions dealt with earlier in this article. Be careful. Educate yourself. Think deeply into new and novel things. It may turn out that their novelty is based on the fact that someone has forgotten the folly in an idea tried long ago and revealed as ridiculous.
Just as with your design work, breaking the rules of commerce can in some cases yield delightful results. But just as with your design work, breaking the rules without knowing the rules usually results in useless junk. Or worse.