Success: Farming vs Mining

One of the better pieces I’ve read competing paths to success. Worth a read, particularly if you’re like me, and come up with a couple of fabulous, worthless ideas a day.

[quote=“Success, and Farming vs. Mining”]
Let’s come up with an analogy and then torture it like we’re the Cheney administration: imagine you’ve just purchased a plot of land. What are you going to do, mine or farm?

If you farm, you’ll have to purchase seed up-front, and work on it for a season before you see any profits. And every season you’ll plow most the profits (literally) back into the land and salaries and your mortgage. You husband the soil to ensure that it’ll keep providing for you for years and years. If you’re lucky, and if you do a good job, you’ll gather a following, sales will increase, and eventually you may make a tidy living. But every season, no matter how rich you get, you’re going to be back out there, breaking your back and working with the soil. When you finally retire, if you’ve done a good job, the soil is as good as when you first got it, and your farm will live on.

Or, you could mine; you’ll need some initial money to lease mining equipment, and to hire some people to work the mine. Then, bam: profit. You’re making money. You tear a giant hole in the ground and eke every last bit of metal out as quickly as possible; there’s nothing to preserve, there’s no soil to keep in condition. You’ll make a big score, then the land will be spent, and you move on, leaving an unusable crater.

Now, you’ve probably figured out I’m not actually talking about mining or farming: this is a metaphor for running a software company. You can either see founding a company as something you’re doing because you want to produce good software, or you can see it as something you do so you can sell your stock and make a killing and move on.

Maybe it’s obvious that I respect one approach more than the other. In fact, I would say that a big problem with our field is that mining is so glamorized: Not only are we inundated with tales of “Look, Bob Smith made a fortune selling his company after two years, and he’s a bazillionaire!” but if you seek outside investment you are usually required to be a miner: few investors are interested in partnering with someone who is going to retain ownership of his company and just make good products and sell them for a fair price. The very first thing an investor is usually going to ask is, “What’s your exit strategy?”
[…]
The most amazing thing about getting to go to TED was discovering that all the people I admire are farmers. The doctors and DNA-researchers and dancers and chocolate-makers and oceanographers and cosmologists and investors all have one thing in common: they are total nerds. They work on the thing they love literally all the time. You can’t talk to them without talking about their passion.

The secret of success turns out to be so incredibly simple: Work your ass off. Really care about what you’re creating, not the fame or fortune you’ll get. You’ll succeed.[/quote]It goes on (and on) like that. Good read.

I don’t really understand his point and his analogy is terrible. Considering it takes about 10 years or in some cases longer to bring a mineral deposit from discovery to a producing mine, farming is actually the fast track. Actually, the environmental impact of farming is actually greater than that of mining. I aslo don’t really get his investor vs. entrepeneur theme either. They are not mutally exclusive. The investor provides capital for the entrepeneur to use to start or grow his business. Sure, I suppose if the entrepeneur is weathly enough to start his business then he won’t need to raise capital and won’t need an investor but that isn’t all that common. Hard to argue that the secret of success is to work your ass of but your reason to do so isn’t what’s important apart from being what gives you the drive to put in all that hard work.

Really? Go look at old farm areas that have been abandoned compared to mining areas.

I can see the point, and in many ways I agree. But I disagree with the last line: The secret of success turns out to be so incredibly simple: Work your ass off. Really care about what you’re creating, not the fame or fortune you’ll get. You’ll succeed.

He’s presenting this as if it’s THE recipe for success, when in fact there are many people who have spent their lives doing something they loved but never achieved what they wanted to achieve. Nassim Taleb calls it the graveyard. We only look at the survivors, and ignore the ones who did the same but didn’t make it. Someone posted an article here by Warren Buffet a while ago, about people getting lucky and attributing their success to something they did when in fact the majority of people who followed the same strategy had failed.

I agree that you won’t get far if you’re not passionate about what you’re doing. But being passionate on it’s own is not going to bring success, unless you also address the fundamentals of your business. So what do you do when there’s a conflict between what you really want to do and what’s going to pay the bills? Starve for your passion? Convince yourself that you’re writing the next killer app or Harry Potter book, when the reality is that most great ideas never get adopted? Keep on growing cabbages when the market nosedives, or build a nice crop of houses?

Really? Go look at old farm areas that have been abandoned compared to mining areas.[/quote]

Yes really, it was one of the more surprising things I learned in Enviromental Science in Uni. To be fair, I’m speaking in the global sense. The bottom line is any human activity is going to have an environmental impact. If you are looking for examples of farming’s impact on the environment I would point to the slashing and burning of rain forest for farming, the effects of agriculture on rivers (try fly fishing at the mouth of the Colorado River) or even the loss of diversity on the praries in favour of monoculture. As for mining, yes I’ve been to Sudbury in the 1980s but, I’ve also come across old abandoned mine shafts while hiking and seen a diverse ecology in and around the site. My point isn’t to argue that Farming is worse than Mining but rather to point out that the idea that agriculture is an environmentally beniegn actively isn’t really true.

A better metaphor would be to point out that with the metals produced by the mine tool are made to make agriculture more productive. Just like the investor and the entrepeneur the two work together and in different ways to benefit society not in competition. Niether one is some-how less honorable or moral.

Really? Go look at old farm areas that have been abandoned compared to mining areas.[/quote]

Yes really, it was one of the more surprising things I learned in Enviromental Science in Uni. To be fair, I’m speaking in the global sense. The bottom line is any human activity is going to have an environmental impact. If you are looking for examples of farming’s impact on the environment I would point to the slashing and burning of rain forest for farming, the effects of agriculture on rivers (try fly fishing at the mouth of the Colorado River) or even the loss of diversity on the praries in favour of monoculture. As for mining, yes I’ve been to Sudbury in the 1980s but, I’ve also come across old abandoned mine shafts while hiking and seen a diverse ecology in and around the site. My point isn’t to argue that Farming is worse than Mining but rather to point out that the idea that agriculture is an environmentally beniegn actively isn’t really true.

A better metaphor would be to point out that with the metals produced by the mine tool are made to make agriculture more productive. Just like the investor and the entrepeneur the two work together and in different ways to benefit society not in competition. Niether one is some-how less honorable or moral.[/quote]

You make good points. It’s something to think about and do a little reading on.

You can’t just say ‘mines’ versus ‘farms’. You must say what type of mine and what type of farm. How is it mined and how is it farmed. How many mines and how many farms. There are minerals/crops that are fundamentally more destructive to mine/farm than others. There are also ways to mine/farm that are fundamentally different. So it is an artificial construct.

The writer of the first article is just repeating what a million and one ‘American dream’ and ‘positive thinking’ books state. There is absolutely nothing original in this thinking. For anyone with an engineering or scientific or artistic or medical background this is already self evident, success is how you apply it mixed with a large dose of luck and opportunity and intelligence and cunning and social skills.y…you don’t go into those disciplines without preparing to work hard, it just doesn’t work otherwise.

As for farming versus mining, well it depends what you want to do (taking the metaphor here). In general it’s taking a short-term or long-term approach to something.

True, but I believe the origins of the metaphor is in analysis of either British and Spanish approaches to New World colonies, or the California Gold Rush. In each case, a few on the mine-side grew fantastically wealthy and moved on, while the farmers set down roots and quietly prospered over the long term. It’s much the same point Steve Jobs has made, only his metaphor was ‘traders’ and ‘builders’, and that Warren Buffet has made: short-term vs long-term horizons. However expressed, the idea’s what matters.

Interesting take, though I don’t really see it. Granted I don’t really know much about the California Gold Rush with respect to Spanish Colonisation. What I’ve read gave me the impression that Spain was more about conquest and bringing back gold while the British were focused on pelts which dependended on setting up trading posts on other infrastructure. Of course this is all based on a very shallow study of the respective histories. I think you’re giving the guy too much credit. I think he just chose mining because of commonly held perceptions of the mining industry. Interestingly enough the largest mining company where I come from (B.C.) is Teck Resources. The Keevil family has been involved with it for ages (hardly a short term take the money and run situation).

As for is idea, as I mentioned earlier I think is premise is flawed as well for the reasons I stated. Regardless, it’s a idea he could have communicated in a far more succinctly.

You’re right. Something in how he said it resonated with me is all.

Getting back on-topic, the issue is one of building a business for long-term goals vs a quick profit.

I don’t see what’s wrong with either. If you build a business with the aim of selling it, it has to be worth buying. Personally, I’m good at getting things started, but not so good at keeping them going. If someone wanted to pay me for starting something that they could take to the next level then that would be good for both of us.

I recently met the CEO of Groupon Taiwan. (He’s going to speak at my conference on Saturday, shameless plug.) He started a business a few years ago in TW, and sold it recently for USD10 million. Obviously, he’s created something that someone else saw a value in. Actually, Groupon saw so much value that they bought him and his team. I don’t know if that was his original plan, or that’s just how it worked out.

I went to a networking event recently, 200 Taiwanese entrepreneurs and investors. I spoke to a couple of people who were trying to find funding for ideas that just seemed insane. They were totally in love with what they were doing, very passionate, quite deluded, and had no answers to simple questions about market size, competitors, or the financials.

I also met a lot of very cool people who are working on very interesting projects. It was, on the whole, a very refreshing and stimulating evening. I was amazed at the talent, creativity and energy I encountered.

We are touching on another point here where a lot of people want an exit strategy for what they do. I guess there is nothing wrong with that per se but there must be, as Loretta pointed out, an intrinsic value to the product or your customer base or your organisation so that somebody will buy it.
The attitude of ‘selling out’ your company does not do any damage to the individual who owns it but often does to the team of people working there, I think that’s where my gripe is with this attitude, it’s like, I’m alright Jack, thanks folks for your hard work and good luck with your shitty future while the new CEO comes in and stamps ‘his’ style for no apparent reason but to show he is doing something, you get cost-reduced down to your pants and shipped off to somewhere else to train your replacement. Ok it doesn’t always work like that but it happens too often to ignore.
It’s also a lack of balls…the really big companies have a drive to push past the limits and not be phased by competitors. Companies like Ryanair, Virgin, Apple…they had many opportunities to sell out, almost went bankrupt a bunch of times but still pressed on by force of personality and belief to become the giants they are now.
They didn’t want to create something and give it away.

I mean, the guy in CEO Groupon Taiwan exited at 10 million, now that’s a number that’s hard to refuse but he is probably going to think he sold it cheap soon and it’s going to suck balls working as part of a big US multinational (knowing Taiwanese they will have another project in the wings…thanks for the cash though :slight_smile:).

I think it takes both kinds. Some people like to start up companies while some want to grow businesses. Remember Steve Jobs didn’t run Apple for quite a period. Also, it depends on the industry. Selling out in the mining industry is actually quite common. For example prospecting and defining a mineral resource requires a different skill set than actually running a mine. As far as the employees left behind go. Often becomming part of a larger corporation opens up more career opportunities. Either way, his job was created through this activity and if things become untenable they should have acquired a resonable set of skills in that time to make them more valuable in the job market. I still don’t see this concept of ‘competing paths to success’. There are many ways to succeed, to each their own. Either way, value and jobs are created.