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October 10, 2005

Comments

spoonix

Eh. The biz folks have this annoying habit of misusing words and working on funky connotations... so he might not have meant the p/e of the stock (which makes sense for investors), but rather of the biz units that make up the company.

Like a roundabout way of saying, "How much money do we spend, and how much money did we make for each dollar we spent?" Marketing and sales generally has a stellar p/e, IT's and R&D's p/e usually are pretty grim (which is why the C?O's always want to get rid of them).

Either way, I've found that if you hear something that sounds like BS in the biz world... it's probably BS.

Like EBIDTA as an indicator of profitability. Heh.

Jamie Fristrom

Nah, he meant good old P/E P/E.

Another gems from the book (I wrote the review before I'd even finished. I just couldn't wait.): he talked about how the CEO at Ford was going to really turn things around, and listed a bunch of his best practices. Since the book came out, Ford's stock has been going into the toilet.

spoonix

Wow.

Just... wow.

The good news, however, is that two other books in the list "First, Break all the Rules" and "Now, Discover Your Strengths" are both good books. "The Design of Everyday Things" is great and should be required reading for anyone doing any sort of development of customer products. The Eliyahu Goldratt book "The Goal" and it's followups are more relevant to brick'n'mortar style businesses (like for example, there's not really an inventory problem to deal with in software development), but it's got some good points to make as well.

So, it's not going to be all "Obviously, *blah*snark*blah*p/e*blah*, and Ford will then prevail." :)

Robert 'Groby' Blum

That's a common thread with all things related to economics. My wife suffered enough of this to finish with a dual major (HR/marketing), and through that, I've been exposed to the wonderful world that is economics.

There are lots of interesting thoughts, but math is not the strong point of economics. (Which really explains a lot, if you think about it). My wife studied in Germany, which usually is very strict about prerequisites for studying. The math prereq's were somewhere along the lines of a HS remedial math class. IIRC, square roots and solving systems with two unknowns where about as far as it got. I don't even want to go into the stochastics advice she got by her thesis advisor. (Of course, she believed her advisor, and promptly got blasted for that bit. It's the only black mark on her otherwise excellent thesis)

The problem, from my POV, is that economics is by nature a rather fuzzy topic. However, since there are lots of people who think you're only a scientist if you add formulas, econ books are laced with simple, silly formulas. That in turn puts people with even a basic math understanding off of studying the topic. Vicious circle.

Now, obviously, there are some economists with a deeper background in math, but they are few and far between. My advice - if you've got an econ book, ignore the math parts.

Jamie

Actually, I think *The Goal* is applicable to game development, and even wrote an article about it once:
http://www.gamasutra.com/features/20040103/fristrom_01.shtml

spoonix

Interesting article... I hadn't thought of how it might apply to production as a whole instead of just the software development part. The observation that you can address bottlenecks by breaking the task up kind of reminds me of XP, and I wonder if that means other aspects of XP could be applied to the entire production cycle.

Any rate. Thanks for digging up the link. I appreciate it. :)

kim pallister

My fave biz book of all time is Geoffrey Moore's "Inside the Tornado". I have bought over a dozen copies of this book and given them to people, co-workers, employees. It's outstanding.

While not directly applicable to pure "starting a startup", there's a lot of stuff in there that will change how you view other companies, what stage of maturity their company and/or technology is in, etc.

Anyhow, that's my recommendation. Hope you like it!

Also, I'd say that the best book for anyone starting or running a company is Andy Grove's "Only the Paranoid Survive". You can read the book if you want, but the main thing is to digest the title and live by it!

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Jamie's Bragging Rights

  • Spider-Man 2
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