I was reading Paul Graham’s Startups in 13 sentences and came along this interesting piece of advice:

7. You make what you measure.

I learned this one from Joe Kraus. [3] Merely measuring something has an uncanny tendency to improve it. If you want to make your user numbers go up, put a big piece of paper on your wall and every day plot the number of users. You’ll be delighted when it goes up and disappointed when it goes down. Pretty soon you’ll start noticing what makes the number go up, and you’ll start to do more of that. Corollary: be careful what you measure.

It had been meshing with my thinking a lot about visualising valued work and community building. I think the same thing applies in both contexts, if you display each user’s post count under their username, then people are going to start posting a lot. If you implement a karma score, then people will try and do things that maximize karma. Not only exposing information about valued work important, not exposing information can also be an important design strategy. Unfortunately, for most online community organisers, there’s little thought about the effects of a feature, features are often turned on just because they’re there.

But chewing over this a little bit before going to sleep last night, I realised that inventives can be thought of as a context free instantiation of values. To have values means that you believe that certain actions are either right or wrong stemming from some base moral reasoning. What incentives do is it replaced that base moral reasoning with a much simpler system of rewards. In other words, you switch from doing something because it’s right to doing it because it’s good for you.

Because incentives are context free, they’re much easier to scale, both up and out. Every person you meet has their own rich tapestry of past experiences and beliefs which influence their value system but every person is going to get exactly +1 to their post count when they make a post.

However, the downside of an incentive system is that they never incentivize precisely what you want to reward and, whenever you get humans into the mix, you’re going to get gaming of the system. Incentives are also inflexible in the face of novelty compared to values because values stem from the motivation rather than the result of reasoning.

Values are more effective but harder to implement, incentives are easier but less subtle. One of the unique advantages that startups have is that they’re still small enough that they can make the effort to instill a strong value system and this is one of their unique competitive advantages. Some companies nowadays are starting to get the picture and have come out full force in the expression of their values but too many still try and ape large companies and hide behind a bland moral ambiguity. More startups need to realise their true values are a massive asset, not a liability and that they won’t have the luxury of having them for much longer.