Read my book

I wrote books about Webpack and React. Check them out!

Wednesday, September 25, 2013

You Are an Investor

You are an investor. You just likely aren't aware of it. Every decision you make can be considered an investment. Usually when people think of investing it is in terms of money. Decisions can be made on whim without considering consequences. Or if you are on the other side of the table you might have hard time understanding why you are getting a "no".

When to Invest?

Whenever you decide to do something you are investing at least your time, sometimes money. Investing time comes with opportunity costs. By deciding to do something instead of some other activity, you lose potential opportunities. This also applies to timing. If you had started exercising ten years ago instead of a year ago, you would likely be in much better shape and avoided some possible complications as a result.

The thing is, it can be difficult to think this way. We only see the immediate consequences of our actions. And better yet we are masters at fabricating stories to explain how we got where are right now even if we just got plain lucky or unlucky.

On the other hand we can manipulate the odds of good/bad things at least a little bit. I like the concept of surface area of luck in this regard. Basically it states that luck is a multiple of doing and telling. That is why blogs are such a great medium. Doing and sharing leads to good things every once in a while. This is a good example of how intentional steps can lead us towards to bigger goals.

One of my recent
charcoal works
A month ago I decided that I want to improve my drawing skills. I committed myself to drawing each day for thirty minutes before I go to sleep. Yup, I have skipped a couple of times but I have kept to this promise mostly.

In addition I enrolled to a course to improve my observational skills. Even though only a short time has passed I can see some results already. I am more confident with my strokes and my technique has improved. I am conscious of details I somehow missed before.

In this case the value proposition for me was clear. By putting some time and effort in it I can reach towards one of my life goals, achieving some level of mastery in one subsection of art.

You might have some goals as well. Maybe you want to finish up that Master's thesis that has been haunting you a while. One very good way to get ahead with these nasty yet nagging things is to put constant, no matter how small, effort towards them.

Why Should Somebody Invest in You?

Crunching the numbers by Ken Teegardin (CC BY-SA)
It is very easy to transpose the situation. Suppose you want to grow a business of your own. Obviously you will have to invest a lot of your time in it. Some businesses require capital by their very nature and more often than not that is something a fledgling entrepreneur doesn't happen to have. Especially when starting from zero.

In this case you may have to either revise your plans and try something simpler or try and seek funding. The big question then becomes, why should somebody invest in you? The answer to this question is different depending on where you ask. You should take your possible source of investment in count.

From a capitalist's point of view the answer is clear. If you can provide me a machine that turns a dollar into two and you can prove that, I will invest. Simple as that. Attaining this proof is the challenge. Rather than approaching with an idea and a business plan it may be more effective to approach with a client list.

The same applies for software projects. In case your project has tapped into some suitable niche, it may grow popular. This popularity in turn may lead to external contributions that improve the quality of the project further. It's an upward spiral. This is something that has happened to me on various occasions. jswiki and colorjoe are good examples of that.


I like to define investing as a two-way transaction. Both parties receive some value out of the arrangement. The key in attaining investments is balancing these two and finding the right ways to collaborate.

Here's a little checklist to go through should you require an investment:
  • Why do I need the investment?
  • What do I need the investment for?
  • What investment sources do I have available?
  • How big an investment do I require?
  • What do the investors get in return?
  • What value can the investors provide for me?
  • What value can I provide for the investors?
Try answering these basic questions before proceeding. There are always options. You should be aware of those.

I hope this post gave you some insight on how I think about investing. Sadly it's often thought as something related to money even though there is way more to it. I am very interested to hear what you think about the topic. Either drop me some mail or a comment below.