| HN Mirror

It's essentially lost profits.

Let's say that your $45/hr number accounts for all the overhead. Just to keep the math simple here.

Let's then say that you generate $60/hr value for the company. That's $15/hr of profit for them right now.

If they could eliminate that delay, that's $10/hr of value you could be adding with that time. That's straight to their profits if they could eliminate it at zero cost.

Now, we both know that it's not zero cost. There's some cost associated with eliminating that delay. If the cost of eliminating that delay is more that $10/hr, it'll cost more to remove it than to realize it. And that'll eat into the $15/hr they're currently making.

We also know that while it'll cost now to fix the delay, at some point it will stop costing because the delay will be fixed. At that point, we get to realize the full profit.

Then it becomes a calculation of how long will it take. Because if it would take $11/hr for an entire year, then it might be worth it to suffer the loss in profits this year because the extra profits in the new year will make up for the shortfall this year.

And if you have multiple people using the app, the cost to fix it gets spread out across all the employees. With two employees, that's now $20/hr I could capture and as long as it costs less than that, we'll be good. Well, less than $30/hr because we aren't capturing that $20/hr until the work is done and we have to pay for the labor in the meantime and that means affecting current profits.

And of course, that scales. The more employees you have using the app, the more you can afford to throw at the problem and the more profitable it becomes to capture that extra. At just 100 employees, that's $1500/hr you can afford to fix this issue and you'll see returns of $1000/hr.