Status Quo Tax

This is another one of those topics that I've posted about occasionally on various forums, and I'm tired of repeating myself so it deserves a dedicated post.

The situation is roughly this: someone says "Oh, it would be great if I could use FOSS for $important_task but $expensive_closed_software is so much better at it." This, to me anyway, always seemed like a terrible situation. You are completely at the mercy of the vendor. They can charge exorbitant fees, ignore your requests. And if they ever change those features that you are completely dependant on, you'll have no way to get your work done.

I like to draw a parallel with technical debt, a fairly well known idea at this point. Technical debt is a simple tradeoff, and usually discussed in those terms. If you want to ignore best practices now, then later you will have to pay it back with interest. A similar argument can be made for using proprietary software. But let's start by considering a more generalized case.

Accomplishing anything will cost resources: time and money. Changing how you do something also requires resources, the same time and money. Plus change carries risk. Many people (and businesses) see the status quo as something to be tolerated and put up with. Changing it would be too hard, too expensive, too risky. Don't fix it if it ain't broke. However this is how you end up stuck at a local optima. When the status quo degrades to the point that it breaks you, fixing anything will be an extremely expensive, difficult and entrenched problem. But you can budget for gradual improvement. Even expensive moonshot projects are manageable, and you can work your way out of a local optima with minimal pain.

Always be improving

An answer is to create a "status quo tax" whose entire purpose is to fund improvement. The general idea is fairly simple: "tax" yourself anytime you do anything that costs money or time. Keep track of the accumulated dollars/hours and then use them on reducing those expenses. I'm fairly aggressive about self-improvement so I tax myself at 20% and I try to apply this philosophy to every aspect of life. Every time I spend $100, I then spend $20 trying to not spend $100 on that again. If I spend five hours fixing a problem, then I spend an hour making sure the problem doesn't re-occur.

Maybe some examples will help. Consider your electric bill. How much money do you put towards lowering your electric bill? For me, that 20% funded replacing all of my incandescent bulbs with CFLs. And then again funded replacing all of the CFLs with LEDs. At this point I was worried that I would start chasing shadows, wasting my "status quo tax" money on pointless feel-good changes. So my next purchase was a Kill-a-Watt meter and a generic IR thermometer. I began letting the data find the problem areas. Some of them were surprising. I had plenty of "free" computers and monitors rescued from the trash. They turned out to be power guzzlers, each consuming $100 per year! They were replaced with $40 ARM boards that only use $5 of electricity per year. I did still need a real desktop, and for that the biggest improvement came from replacing the traditional PSU with a PicoPSU. Before buying a new $600 "power efficient" fridge, I metered my old one for a month. It was only using $60 per year, modern fridges aren't really better than that. If your old fridge meters high, try cleaning the dust off the radiator elements. It makes a big difference. (I have been experimenting with a converted chest freezer. They really do only sip a few dollars of electricity per year.)

Note how much easier it was to make decisions when they are informed decisions. It took me a few years to figure this out, but the first thing that your "status quo tax" should fund is acquiring accurate information. In the case above it was a Kill-a-Watt meter. If you are trying to make more time in your day, consider starting by using your 20% to make a log of how you spend your days. Don't optimize blindly, and don't buy into something just because someone says it will save time/money.

But don't stress the exact numbers too much. With the lightbulbs, there was an extremely fast return on investment. Even without the status quo tax it makes sense to replace all your bulbs today. The idea though is that the status quo tax gradually accumulates and eventually allows you to try impractically expensive things. Continuing the electricity example, my "free" CRTs were also power guzzlers. But since they turn off after 15 minutes they don't actually use much electricity. If all you are looking at is ROI, keep your CRTs. However the 20% tax was able to fund replacing them with LCD panels, for a modest saving of electricity and a more substantial quality of life improvement.

Similarly, if your heating bills are too high then you should be spending a proportional amount of money of weatherproofing, sealing air leaks and insulation. If you are curious about that, take a look at the Half Plan movement.

Maybe merely reducing expenses isn't good enough. Maybe you want to go for complete elimination. Usually these measures will center around replacing an ongoing high operating cost with a more efficient alternative that has a high up-front cost. In this case, save and stockpile the proceeds from the "status quo tax" for a few years and then spend it on the replacement.

Anything that takes your time could be done faster or more effectively or more safely. Take a little time performing deliberate practice. If you are going to do something you might as well be good at it, right?

It can be applied to the food you eat as well, but that is a very deep rabbit hole and I should probably save that for a dedicated post about cooking efficiently.

What about situations where you aren't necessarily interested in reducing costs? For example, your mortgage. Most people aren't going to sell their home just to save a few percent on that. If it isn't practical to reduce costs, then consider increasing effectiveness. Locations gain value based on what is near them, so spend some resources on knowing your area. A small status quo tax on mortgage payments can cover an annual neighborhood barbecue for example.

How does this apply to organizations?

First, most organizations would be horrified at the idea of adding what amounts to a 20% VAT on everything they do. Like I said, I consider myself an outlier with how much effort I throw into this. Perhaps 5% is more reasonable.

Be careful to consider the total cost of ownership and the ramification of goals. Eg, don't spend 5% of payroll trying to offshore your employees. It will backfire. Instead put it towards making employees more effective at their jobs.

To loop back around to technical debt and software, do you have licensing costs? What could 5% of those licensing costs get you? If it is enough to hire a full-time programmer, do that! Their only goal is to make an in-house version of the hideously expensive software. Remember that all software has been created by a person typing into a computer. If it has been done once then it can be done again by another person. Alternatively, give your engineers one day a month to work on this sort of project.

Maybe there simply isn't any competing software at all and you don't have the money to fund development. We FOSS programmers typically only volunteer for stuff that we understand. Spend your 5% on writing about what your work involves and what you need software to do. If you want to be really sneaky, present these as tutorials teaching how to use the expensive software.

What happens if it actually works?

Paradoxically, after fixing all of the low-hanging fruit it doesn't make sense to invest in the very costly upgrades. In my electricity example, going solar is pointlessly expensive. That 20% keeps getting smaller, reducing the capital I can justify for future upgrades. So far this is the only flaw of that status quo tax that I've run into. Supposedly the march of technology will eventually create something new worth investing in but for now I twiddle my thumbs waiting for existing tech to get much cheaper.

Will a business run into this problem too? After years of pouring money and feature requests into a FOSS project, the much anticipated Version 2.0 is released. It is finally good enough to replace the expensive software you've been using, and that week you make the change. Now you aren't spending any money on those licensing fees. Do you continue to give money to the FOSS project? Hopefully businesses realize they can afford to continue to give 5%, and be happy enough with a 95% savings instead of a 100% savings.