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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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Why Scientists and Engineers End Up on the Wrong Side of the Value Equation

Comments (14)

This morning I hosted a presentation by the MIT Deshpande Center about their program to a group of Colorado VCs. I’m really excited about what the Deshpande Center is up to and will blog about that separately. Steve Halstedt from Centennial Ventures – a long time VC and one of the guys I’ve learned a lot from (we were both on the Raindance board together) – sat next to me and wrote the following down in the middle of the meeting and handed it to me.

Why scientists and engineers, who know so much, make so little compared to VCs (or investment bankers, or trial lawyers) who know so little.

   Time is Money

   Knowledge is Power

   Power = Work / Time (from high school physics)

   If you substitute Knowledge for Power and Money for Time

   Knowledge = Work / Money

   Using a little basic algebra (about the amount most VCs remember) and arranging terms, you get

   Money = Work / Knowledge

   For a given amount of Work as Knowledge apporaches zero, Money becomes infinite.

   This explains the difference in market value between scientists/engineers and VCs.

  • http://paul.kedrosky.com/archives/000743.html Infectious Greed

    Pick Me, Brad

    Yo Brad, what about us? While Brad Feld writes rapturously about MIT’s Deshpande Center in an entry over on his blog, I’m sure he is planning to write something equally nice about the von Liebig Center here at UC San…

  • http://www.hobbit-hole.org/index.php?p=40 The Hobbit Hole

    Why Engineers make so much less than Venture Capital fund managers

    I’ve seen this equation before in relation to other things, but it rings very true in this case.

  • RFP

    This makes the email rounds every few years. I first saw it some ten years ago but I suspect it is older then that. Each group initiating it tends to adapt it to suit their agenda. Perhaps this version indicates a focus on money over originality?

  • http://ven.typepad.com/vensdiagram/2004/11/you_want_power_.html Ven’s Diagram

    YOU WANT POWER OR MONEY?

    I’ve never seen this equation before; but it seems to make sense.

  • http://ven.typepad.com/vensdiagram/2004/11/you_want_power_.html Ven’s Diagram

    YOU WANT POWER OR MONEY?

    I’ve never seen this equation before; but it seems to make sense.

  • http://optimalaccess.blogspot.com Karan Bavandi

    Yes amusing. But consider this. Time is not money. They are different types.

    In time you can make money, or you can lose money, but knowledge is always power.

    Knowledge is eternal, money is not. Smart people invest money in knowledge not money just for the sake of making more money!

  • Joe Leoglacious

    In the corporate realm, I think the value equation needs some corrective action. It is certainly revealing to me, to witness insulting, self-centered, six figure, micromanagers crush all hope for ingenuity and intelligent direction in a major corporation.

    How about a cooperative business model or allowing workers to elect our CEO’s every four years? Where is the incentive for the working guy?

    As an engineer, I know I could be making equal or better money with far less ‘work’. I walked into this business for the challenge and reward of helping others; certainly not to make my idiot boss look good!

    I have to say, I wouldn’t recommend science or engineering to a young person right now. If knowledge is power, our power is in danger of going over seas!

    How about that, you can outsource US engineers from overseas! Coming soon to a theater near you! Really, IMHO, we employees should be outsourcing our management. We deserve better than this.

  • http://www.enochchoi.com/thoughts/archives/001302.html medmusings

    Money = Work / Knowledge (infinite $ as knowledge approaches zero)

    a funny joke via VC Brad Feld, via VC Steve Halstedt Why scientists and engineers, who know so much, make so little compared to VCs (or investment bankers, or trial lawyers) who know so little. Time is Money Knowledge is Power Power = Work / Time (from…

  • http://torque.oncloud8.com/archives/000490.html tim’s journal

    One scientist’s defense – re: Money = Work / Knowledge

    It has been said, that Time is Money, and Knowledge is Power. By substituting these intoPower = Work/Timewe quickly find thatKnowledge = Work/Moneyleading us quickly to the infamousMoney = Work/Knowledgewhich has presumably been used by VC’s and CEO’s …

  • http://torque.oncloud8.com/archives/000490.html tim’s journal

    One scientist’s defense – re: Money = Work / Knowledge

    It has been said, that Time is Money, and Knowledge is Power. By substituting these intoPower = Work/Timewe quickly find thatKnowledge = Work/Moneyleading us quickly to the infamousMoney = Work/Knowledgewhich has presumably been used by VC’s and CEO’s …

  • http://www.enochchoi.com/thoughts/archives/001302.html medmusings

    Money = Work / Knowledge (infinite $ as knowledge approaches zero)

    a funny joke via VC Brad Feld, via VC Steve Halstedt Why scientists and engineers, who know so much, make so little compared to VCs (or investment bankers, or trial lawyers) who know so little. Time is Money Knowledge is Power Power = Work / Time (from…

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