A future is a financial instrument (a thing you invest in) where you commit to paying a price today to receive something tomorrow. The price could go up or down tomorrow, but you’re locked into today’s price. Price goes up, you profit; price goes down, you eat the difference.
A feature is a thing that software does. For our purposes, we’ll say it’s also work that enables a feature: setting up CI, writing tests, refactoring code, adding documentation, etc. The general idea behind software development is that you should gain more time using a feature than the time you spent implementing it.
The Enterprise-D is a fictional space ship in the Star Trek: The Next Generation universe. It can split into two spaceships and is pretty well armed for a ship with an exploratory mission.
Today, Geordi and Worf (middle management) are recalibrating the forward sensor array. It takes them most of the day, but they get the job done. Captain Picard is studying ancient pan-flutes of the iron-age Vulcan era. Data (an android), as an experiment on his positronic net, is trying to learn how to tell an Aristocrat joke.
Tomorrow, in a series of events no one could predict, our friends find themselves in a tense situation with a Romulan Bird of Prey. Luckily, Worf detected it minutes before it decloaked, thanks to the work he and Geordi had performed the day before. This particular Bird of Prey is carrying ancient Romulan artifacts dating back to their own iron age. Amazingly, Picard is able to save the day by translating the inscriptions, which aren’t too different from Vulcan pan-flutes, and prevents an ancient doomsday weapon from consuming the Bird of Prey and Enterprise alike.
Data’s Aristocrat joke is never used. That’s good, because this is a family show.
Our friends on the Enterprise are savvy investors who look at their efforts in terms of risk and reward. They each invest time today into an activity (an instrument, in financial terms) which they may or may not use tomorrow. We can say that if they end up using the instrument, it pays off. We can then measure the pay-off of that instrument by assigning a value to the utility of that instrument. If the value of the instrument exceeds the time they invested in “acquiring” it, there is a profit.
Geordi and Worf’s investment was clearly a profit-bearing endeavor. Few other uses of their time, such as aligning the warp crystals or practicing Klingon combat moves, could have detected an invisible ship before it uninvisibles itself. In Wall Street terms, Geordi and Worf are getting the fat bonus and bottle of Bollinger champagne.
Picard’s investment seems less clear cut. It did come in handy in this particular case, but it probably wasn’t the only activity that would have saved the day. He could have belted out some Shakespeare or delegated to one of his officers to reconfigure the deflector dish. We’ll mark Picard as even for the day.
Data totally blew this one. His Aristocrat joke went unused. Even if he had used it, the best outcome would be that it’s a lame, sterile groaner that only ends up on a DVD extras reel. Data is in the red.
In terms of futures, we can say that the price of working on the foward sensor array went up, the price of pan-flute research was largely unchanged, and the price of Aristocrat jokes plummeted. Our friends on the Enterprise implicitly decided what risks are the most important to them and hedged against three of them. Some of them even came out ahead!
I’m working on software. Today, I can choose to do things on that software. I could 1) start on adding a new feature, 2) shore up the test suite, or 3) get CI setup and all-green. Respectively, these are futures addressing 1) the risk of losing money due to missing functionality, 2) losing money because adding features takes too long to get right, or 3) losing money because things are broken or not communicated in a timely manner.
Like our Enterprise episode, it’s hard to value these futures. If I deliver the feature tomorrow and it generates more money than the time I put into implementing, testing, and deploying the code, we’re looking at a clear profit. Revenue minus expense equals profit, grossly speaking.
Shoring up the test suite might make another feature easier to implement. It might give me confidence in moving code around to facilitate. It could tell me when I’ve broken some code, or some code is poorly designed and holding me back. But, these values are super hard to quantify. Did I save two hours on some feature because I spent one hour on the test suite yesterday? Tricky question!
Chore-ish tasks, like standing up a CI server or centralizing logs, are even harder to quantify. Either one of these tasks could save hours and days of wasted time due to missed communication or troubleshooting an opaque system. Or, they might not pay off at all for weeks and months.
I’m going to start writing down what I worked on every day, guess how many hours I spent on it, and then revisit each task weekly or monthly to guess if it paid out. Maybe I’ll develop an intuition for risk and reward for the things I work on. Maybe I’ll just end up with a mess of numbers. Almost certainly, I will seem pretty bookish and weird for tracking these sorts of things.
You should look bookish and weird too. Let me know what you find. I’ll write up whatever we figure out. Maybe there’s something to this whole “finance” thing besides nearly wrecking the global economy!