Thursday, August 8, 2013

Free Time Is (Not) Free

There is a quote from The Mittani that has been bouncing around my skull for the last month about how "HS industrialists will clamor and fight over single-percentage-point margins... and null industry will not exist when it's essentially raw cost + shipping to get it to front lines".  I am paraphrasing, but he's essentially right.  Despite the fact that older players eventually learn the lessons, thoughts like "mined minerals are free" or "free time is free" are pervasive.

In my new corp's recent SOTC, the industrial director expressed the desire to have more POS reaction farms, but was unsure how to achieve that goal.  Doing my duty, I proposed a scheme: tax private POS.  Under the plan, I provided a path that the corp would be entitled to basically the margins it is currently receiving, but could expand that revenue for zero corp-level capital costs.  Furthermore, I built up a working prototype tool to help parse API data so it would be easy to track who owed what.  Unfortunately, the plan was shot down because "Paying industrialists is a slippery slope and incentivizes the wrong behavior".  Furthermore, "because you should want your effort to help the corp grow" altruism should make you want to donate your time/talent/treasure for the good of the team.

If your corp business plan for industry is the above: stop right away.  Here's a better plan that involves less effort, and yields EXACTLY the same margin/member: PLEX for membership.  If you're going to bilk people for their time to achieve your personal goals, with no shared wealth down the line, you're better off just charging membership fees and avoiding all that pesky "revenue generating" that takes time away from "elite PVP".  I get that there's a need for shared effort to achieve goals, but this isn't sharing.  This is like working at Walmart: executives gather 13k/employee in profits above wages paid (largely on the back of welfare subsidies).  If there is a big goal, there is room to share the wealth and still rely on pilots "contributing to the greater good"

Frankly, I operate on a policy: If I can't afford to pay people to do it, I can't afford their help.  In my own work, I've strived to prove that you could pay at least 1 PLEX/mo/char and still have more than enough margin to grow the corp.  If I can generate 3-5 PLEX/mo off one character's work, why is it too much to ask for that endeavor to cover my account fees?  Or directly put ships in my hangar?  If you are going to get rich purely by burning human capital until it burns out, AWOXing or straight out theft/scams are a better path.  If you can't share the wealth getting rich, then you aren't getting rich.

"Bottom up income" has been a marching call for CSM and those who believe that moon incomes are game breaking.  The tools exist to build large scale, bottom up incomes with industry, but it also requires OOG tools and some creativity.  Frankly, what directors seem to want is just a "set knob, recieve money", which more and more I am against.

6 comments:

Druur Monakh said...

Back when my Indy corp was still actively indy, we had the policy that nobody had to work for free, usually using the corp tax rate as guideline.

The people doing the work of running the jobs to build a freighter from corp-minerals and -bpos received 10% of the profit.

When I ran private reactions on the corp POSes, I paid 10% of my profits as voluntary tax. When I ran reactions for corp projects, but out of my own funds, I sold the materials to the corp at a 'preferred price' which gave me some profit, but still saved the corp money.

It worked pretty well.

John Purcell said...

Specifically on the moon reaction proposal, I had proposed a 25% fuel tax (equal to sov bonus). I would offer an export tax, but the accounting is more difficult to track automatically.

Frankly, work is a two way street... and if both parties aren't winning, then it's a shitty deal!

Soo the Pirate said...

I am interested in how you plan on implimenting the PoS/Tax plan. I am all ears.

John Purcell said...

Original plan was to pay the fuel savings from sov as tax to corp. Since reactions only require fallow or worthless moons, seems pretty easy to get real estate. I have a prototype tool that takes the POS feed from the corp API and allows you to designate owners in a DB and then it will split billing up a bit like this: https://docs.google.com/spreadsheet/ccc?key=0Atv4WV8DEJUPdHdGaTd0dGprYjJ6TXlmd05wTVMzaFE#gid=5

Private players front the equipment/material buy in, and the corp reaps the tax for just the effort to initially set up the POS. Destruction, upkeep, margins are all the member's problem.

To set this up in LS would probably require a different offer though. Trying to set aside an additional 25% fuel cost from base really limits margins. Would need a more robust tool/plan to handle export taxing.

Druur Monakh said...

Just to add: when I ran my own reactions, I either bought the fuel straight from the market myself (the usual case), or I compensated the corp at market price for corp-bought fuel (essentially I bought the fuel from the corp). Buying consumables from your own corp may feel funny at first, but it makes book keeping really easy on both sides.

This should work even with Sov-related fuel savings: any expense saved on fuel increases the profit margin, which in turn increases the absolute value of the n% profit tax. And by reducing the effective fuel cost for the corp to 0, complicated schemes to account for varying fuel prices aren't necessary.

Krauug said...

When I had more time for games a year or so ago (before POS changes to MUCH shorter anchoring / online times... 1 hour for a silo...) I managed 20 POS for my corporation. I also ended up as the CEO.

POS management takes time. Time to fuel, time to transfer materials, time to prep for JF, and it also takes TRUST of the person involved won't take off with the goods. When I became CEO, I had less time to manage POS, so I paid corp members (I trusted) to do it. The rate was 125m / hour or 10% of the PROFIT (not cost), whichever was greater. (0.0 corp, so the 125m represented approximate ratting income in a carrier.)

The location and reactions involved for the 25 POS ended up in 3 hours of hauling / week, which could be extended if reds were roaming. The profits went to pay for fuel on the non-reaction POS, the sov fees/upgrades we wanted, and a limited ship compensation program for corp roams.

Our corp was never rich, but that wasn't the goal. The goal was to make our members flippin' wealthy. (Think about that for a minute...)

Most of our members averaged $1-2bn income / month. I have a detailed view of this as I ran the JF to highsec and did the sales for the members, which was crucial as we were over 60 jumps away from low sec space. (Corp took a 5-10% cut, item type depending.)

Even when a director was hacked, the loss of isk was irrelevant as the corp was enriching members, not the corp bank. The biggest 'loss' was the 2 months of JF & POS fuel reserves, which we eventually got back after CCP confirmed the hack.

If your corp is touting you MUST do something "for the corp" they're doing it wrong and it will only get worse. There are better options out there.

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