From: Lucian Mogosanu Date: Sat, 16 Aug 2014 09:21:46 +0000 (+0300) Subject: posts: 028 X-Git-Tag: v0.4~15 X-Git-Url: https://git.mogosanu.ro/?a=commitdiff_plain;h=4225e0661146905b71efcd1daf88ba162171e7d4;p=thetarpit.git posts: 028 --- diff --git a/posts/y01/028-building-business-or-why-gypsies-are-smarter-than-romanians.markdown b/posts/y01/028-building-business-or-why-gypsies-are-smarter-than-romanians.markdown new file mode 100644 index 0000000..9be9295 --- /dev/null +++ b/posts/y01/028-building-business-or-why-gypsies-are-smarter-than-romanians.markdown @@ -0,0 +1,127 @@ +--- +postid: 028 +title: Building business, or why (some) Gypsies are smarter than (most) Romanians +excerpt: A case study on self-regulating systems. +date: August 16, 2014 +author: Lucian Mogoșanu +tags: asphalt +--- + +I feel compelled to step into this essay by means of a short digression: I +can't help but notice how many inhabitants of the Internet seek to make a +living off sensationalistic titles such as "How to $X$ your $Y$ business using, +or from, or by $Z$"; because nothing sells better than "The Best Business +ever", like there aren't a zillion definitions for "Best" and like "Building +Business" is a piece of cake. Which, of course, it most definitely is not. + +Fortunately this is nothing of the sort. But I feel once again compelled to +digress, discussing my own background into the matter: I have nil knowledge on +the matter of building a business. Which is why the reader, as a young or old, +or experienced or, on the contrary, inexperienced entrepreneur, might wonder +what lessons have I to teach them. Well, maybe I have none, but then again... + +I have been fortunate enough to study a tiny bit of game theory for my computer +scientifical diploma thesis. Thus I know that the "Best" business isn't the one +that maximizes profit and/or income, or social utility or whatnot. In my +opinion, the best business[^1] is the one from which all or most of the agents +can benefit, i.e. extract the most utility, in an otherwise perfectly hostile +environment such as product, labor, financial markets, and so on and so forth. +It is what physicists would call a closed system, or what biologists would call +an ecosystem, or what game theorists would call a nash equilibrium, possibly +one attained using mixed strategies. + +Facebook, for example, has proven itself to not be an ecosystem upon which +entrepreneurs could build their businesses. Sure, it worked for a while for +more or less dubious companies[^2], but in the long term, the whole "reach", +"engagement", "click-through" etc. marketingspeak has been nothing but harmful +to both companies and clients. This, I theorize, happens because Facebook has +in this game a stake which is in direct conflict with either the users' or the +companies' utility (or maybe both), which in a zero-sum game does not +necessarily lead to what we would call an equilibrium. But as previously +stated, I have no background in economy nor finance[^3], so my theories should +at least be taken with a pinch of salt. + +I shall, instead of theorizing, share a case study which, I assure you, is +perfectly real and has left me thinking for a bit, even though the story might +on a first glance seem trivial and uninteresting, but which, I once again +assure you, is anything but that. + +You see, the capital of Romania[^4] is split up into six Districts +("Sectoare"). Arguably the least developed of them is the fifth District +("Sectorul 5"), locally governed by a Gypsy mayor, a fact strongly correlated +with and also caused by the great number of Rroma people in District 5. If +you're not Romanian, or European for that matter, you might be blissfully +unaware of the fact that Gypsies are of a way of being that is shockingly +different from that of the Romanian ethnics: being held slaves for hundreds of +years and freed from slavery at the half of the 19th century, they remain a +resilient social group, in that they aren't interested in any way in +"integrating" with the other Romanians, either because they're dumb or because +they in fact have some kind of culture worth defending; hard to say. + +By "shockingly different", I mean that their way of being is what some would +call "barbaric": they live in tents, don't in general have a taste for hygiene +and their morals are rather harsh. What's more disagreeable in this (sub)urban +Bucharestian context is that, save for a few, they are poor and poorly +educated, do drugs and are very prone to crime, especially small theft. This is +quite unfortunate among others for the Romanian locals, not too wealthy +themselves, thus not too fond of having a relationship of any kind with their +Gypsy neighbours[^5]. + +Until one or two years ago, this social problem also led to others, such as +ecological ones. You see, no one likes to live in a neighbourhood that smells +like shit, yet sanitation services were for a large period of time, as many +other public services, available only on paper, not also in practice. The +situation gets more complex, but the general idea is that the streets of +Rahova, Ferentari and other neighbourhoods in District 5 were, with few +exceptions, not quite devoid of garbage. And while in Berlin this would be the +cause of outrage, in Romania no one bothers to cry in public about it, because +that's what fifty years of communism has done to people[^6]. And to think about +it, the authorities even placed public ecological bins for the locals, only the +locals, Gypsies and Romanians alike, have little respect for the establishment, +so they misused those however they could. + +Now, as all self-regulating systems go, it seems like there was (and is) a way +to profit from this otherwise bleak situation. First, a few wealthier Gypsies +from the Gypsy mayor's circle of business partners bought some barren, or maybe +toxic pieces of land. Then they opened what one would call "ecological trash +dumps" for any and every type of bottles, including but not limited to the +biodegradable ones. + +The first step was, of course, to pay the aforementioned sanitation services a +little extra for garbage sorting. I have no idea if this is really profitable, +but I wouldn't be surprised if it was, since this most probably uses funds +coming from the European Union, District 5 or no District 5. The best part of +it, however, is that, with this crisis and all, people with no jobs started +gathering bottles off the streets themselves and bringing them to these dumps. +So you see, if you walk through Rahova in a summer evening, you'll see a guy +off the streets who's gathering cans of beer left behind by some other +drunkard, "for free", since he's not really doing it on taxpayers' money. He +might not be making much money, but he's learned that something is more than +zero and working your ass off beats sitting your ass off at any time in human +history. + +And this is how, dear reader, we arrive at the whole crux of the story. +Building the "Best" business doesn't require "genius", "talent", "innovation" +or other such empty words. Building business, not one, not many, but business +as a general thing, requires looking around you and solving that problem to +help your selfish needs, and only incidentally those of your peers. This +matters, while the government not giving senior folk bigger pensions or +Facebook not working does not. + +That is all. + +[^1]: And you might have remarked that it is my opinion, which is why I'm +talking about the best, and not the "Best". + +[^2]: Zynga. + +[^3]: Basically I have no idea what I'm talking about. Or have I? + +[^4]: Bucharest. + +[^5]: And this is what leads to social tensions, but this is a story for +another time, maybe. + +[^6]: Also read [The mechanics of socialism][1]. + +[1]: /posts/y00/017-the-mechanics-of-socialism.html