The most valuable individuals in the future
Perplexity co-founder Johnny said: "If I had to guess, over time, technical product managers or engineers with product sense will become the most valuable people in companies."
Two key points: programming language and product sense.
Learning English in the past first allowed direct communication with more people, and secondly, through learning a language, one could better understand the other's culture. Learning programming languages similarly allows us to communicate directly with more machines, and through learning programming languages, we can also better understand AI.
Product sense refers to a deep understanding of user needs and an intuitive ability in product design. It involves thinking from the user's perspective to design products that meet user needs, are easy to use, and are attractive. At the same time, it includes understanding business models and profit mechanisms, allowing for consideration of commercial goals during product design.
Transaction costs
The chart above illustrates Ronald Coase's theory on transaction costs between firms and markets presented in his article "The Nature of the Firm":
: The cost required for internal coordination and management of resources within a company. This includes various internal operational expenses such as communication, supervision, and management.
: The cost required for a company to conduct transactions in the market. This includes expenses such as finding trading partners, negotiating contracts, and supervising and executing contracts.
According to the chart, the reason for the existence of enterprises is that internal transaction costs are lower than external transaction costs. When the cost of conducting transactions in the market (external transaction costs) is higher than the cost of internal coordination within a company (internal transaction costs), people choose to produce and transact internally within the company. Conversely, when external transaction costs decrease to a certain extent, people may choose to conduct transactions through the market rather than through a company.
Management is anti-scale; the larger the organization, the lower the efficiency and the higher the internal transaction costs. In the future, with technological advancements and reduced information asymmetry, external transaction costs may further decrease, meaning companies might reduce in size, and even the phenomenon of "a single-person unicorn company" could appear. That is, individuals who understand code and products can effectively operate in the market and achieve the business scale and influence previously only attainable by large companies by utilizing advanced technology and platforms.
The evolution of families and companies
Let’s look at how families and social organizations have changed over time, reflecting advances in technology and lifestyle. Linking this analogy to the relationship between companies and markets can provide a clearer understanding of future trends in corporate development.
: In early societies, living costs were very high, and starting a fire alone took several hours. The entire tribe needed to collaborate and divide labor to ensure its survival.
: In ancient times, the extended family model emerged because extended families could effectively reduce living costs through internal member division of labor. Each family member assumed specific tasks, sharing various responsibilities of daily life.
: In my parents' generation, the family remained an important social unit because it greatly reduced living costs. Family members shared expenses for food, housing, and child-rearing, making life more economically efficient.
: Technological progress and the development of the service industry have made individual living more convenient. People can purchase processed food at supermarkets, solve various needs through delivery services and flexible employment. Individuals no longer need to rely on families to reduce living costs. If not for love, there is no need to compromise and find a partner.
This analogy is very similar to the relationship between companies and markets: the development of modern company technology and the service industry allows many tasks to be completed through outsourcing, freelancers, and market platforms, reducing reliance on large-scale internal corporate organizations and lowering external transaction costs. Just as modern individual life has become more independent, future companies will also become more flexible and individualized. A person (as mentioned earlier, someone who understands code and products) can efficiently complete tasks that previously required large companies through technology and market platforms. This is akin to a "single-person unicorn company," where an individual can use advanced technology and services to achieve what only large companies could previously accomplish.