> I used to write my bingo cards myself, and I’m fairly good at it, but eventually I figured that while it was a worthwhile activity it didn’t really get all that much more worthwhile as a result of me doing it. Instead, I put out a call on my blog for freelancers, and eventually worked out a mutually rewarding relationship with a highly-educated American teacher. She bangs out the cards on her own schedule, and once a month I click “Post” on my backend interface and then mail her a check.
> The economics of this arrangement are so staggeringly efficient that people tell me I have to be lying about it. The pages my freelancer writes for me were visited 65,000 times in September, producing roughly $1,300 worth of sales for me through getting people into my various conversion funnels. I did less than five minutes of work to maintain the freelancing relationship in September. Do you want to do the math?
I find myself hoping that she sees this post and ups her prices.
I detect a bit of resentment here, as if I'm some rapacious capitalist baron exploiting the poor teacher. That's one way of looking at it. Here's another: teachers are expected to produce teaching supplies on their own time, for use in their day jobs but without receiving any compensation for them.
The market price associated with these teaching supplies is zero: there is absolutely no one, in the entire world, who cares enough about what one particular teacher's opinion on good bingo topics is to pay her a dime for it. Except me. I paid her a few thousand bucks to copy/paste her activities into a web form.
Importantly, without me, she'd have 750 activities and no money because she has neither the time, skill set, nor inclination to produce a Ruby on Rails application and then market it on the Internet. I'm the guy she outsources that to.
If you are clearing so much thanks to her that you can chortle about it so happily, then that suggests to me that she can get more from you; if she can get more from you but isn't, then you're underpaying her, which I have a strange irrational urge to call 'unfair' and cast all sorts of moral connotations on (but I'm sure at Hacker News I'm just an outlier in that regard).
The other alternative is that you are over paying her (no doubt out of the goodness of your heart), which I think can be rejected given that your whole post is about optimization of things like that.
(The third option of course is that the price is exactly right, but as you are neither of you _Homo economicuses_ with unlimited computing power, perfect information, and working in efficient markets, that's extremely unlikely.)
Hmm. Well, you've got me, I self-identify as a capitalist. I am efficient in most of my dealings because that lets me choose how to distribute my surpluses rather than having no surplus to distribute. I do things which are not strictly speaking economically efficient with my surpluses of time and money: I play video games, I donate to charity, and I pay freelancers more money than the lowest possible amount they would work for me for. That's the whole point of optimizing away the things I don't care about, like time spent writing bingo card word lists.
As I mentioned, I have a global monopsony on bingo card word lists. (A monopsony is to buying as a monopoly is to selling.) As predicted by MicroEcon 101, the market clearing price for bingo cards is whatever I say it is. I used to say it was $1 each, before I said it was $1.50 each, before I said it was $3 each. I keep walking it up because I'm happy with the arrangement and like to keep my freelancers happy. I don't need to, any more than I needed to send her a Christmas card with a month's wages in it, but I do a lot of things that I don't need to do.
Could I say the price is $30 each? Yeah, sure -- all it would take is writing another zero on my check. Am I under any particular obligation to do that? I haven't heard a compelling reason why yet.
You are, of course, free to call me "unfair". You're also free to open your own business, compete against me, break my worldwide monopsony on bingo card writing labor, and pay her any price you darn well please. If you can beat a few thousand a year, I'll happily forward you her contact information.
I'll refrain from giving my opinions as to the relative moral worth of entrepreneurship and telling entrepreneurs how to spend their money, as they would get political very, very quickly.
That's an excellent answer; if you claimed #1 or #3, I was going to ask how you expect 100/hr out of posting to and commenting on HN (since I can't see that HN demographics would generate many bingo-card customers).
He had no idea whether it would work when he set up the relationship so he was taking a risk and she wasn't. His risk paid off.
She was happy to get X money for Y job. Should the fee be renegotiated whenever he finds (or more likely, creates) more value? Should he also pay higher hosting fees, and maybe more for his domain because now it's worth more?
> He had no idea whether it would work when he set up the relationship so he was taking a risk and she wasn't. His risk paid off.
And was she taking no risk either? She risked non-payment just as he risked non-delivery. Even if she didn't specifically take a few minutes/hours/days to make the cards, if we grant that the bingo cards have value as intellectual property, then she must be risking it by sending them to him.
More to the point, does taking a risk justify perpetual profit? Should an author profit forever from a book? Patents never expire?
> Should the fee be renegotiated whenever he finds (or more likely, creates) more value?
If she signed a long-term contract, then she could keep it. But it sounds like she really is free-lance/at-will, and a renegotiation could happen every time, sure.
> Should he also pay higher hosting fees, and maybe more for his domain because now it's worth more?
Again, why not? Such fees or taxes are common; consider property taxes. What are they but a 'higher fee' because some piece of land is 'worth more'?
It's not the same as property tax, because she's not a government and the power bases are quite different. Governments can get away with it because the switching cost of moving to another country or state is just too high, and they have all the power in the relationship so can charge what they like. That's the abuse, if you're looking for it. Switching costs of bingo card writers is very low. Nonetheless, he's voluntarily paid more than he could have.
There's very little IP value in bingo cards. It's a collection of words for SEO value. You could swap them out with another collection and you'd have a similar result.
> The economics of this arrangement are so staggeringly efficient that people tell me I have to be lying about it. The pages my freelancer writes for me were visited 65,000 times in September, producing roughly $1,300 worth of sales for me through getting people into my various conversion funnels. I did less than five minutes of work to maintain the freelancing relationship in September. Do you want to do the math?
I find myself hoping that she sees this post and ups her prices.