Identifying Tech Debt and turning it into an investment(nojvek.substack.com)
nojvek.substack.com
Identifying Tech Debt and turning it into an investment
https://nojvek.substack.com/p/tech-debt
1 comments
Absolutely. Very well put. There’s good debt which you can leverage to grow. Same as VC money.
Then there’s bad debt, which is predatory just like bad VCs and payday loans.
Then there’s bad debt, which is predatory just like bad VCs and payday loans.
So the basic accounting equation is Assets = Liabilities + Equity. Any increase in liabilities must be balanced with an increase in Assets (you use a credit card to buy a lamp) or a decrease in equity (taking out a predatory payday loan to cover utilities).
The flipside of this is if you increase your liability to gain an asset worth even more, your equity goes up (take out a loan to buy a house that appreciates in value beyond the interest rate). This is what the goal of technical debt should be, increasing the "equity" of the software.