• Mike

#9- Contextual Valuation, Diminishing Returns - Part 2

Updated: Jan 15

Part 2 - Defining diminishing returns

I think being honest with ourselves is one of the hardest things we learn how to do as people. We're simultaneously the hero and the villain in our lives, meaning we have played a part in times of our lives we aren't proud of. Being able to accept this allows us to better define our situation, and what we want it to be for our future self. Similarly, if we take a deep dive into any subject, we can gain a better understanding of what we need compared to what we want. There is a huge difference between the two, and when we understand our needs and our wants we can develop a picture of what our personal point of diminishing return really is.

The more we use something, the less of a value cheaper options might be if they break or don't meet expectations. For example, we might have to buy 3 cheap things before one works, yet we spend more money on them than 1 good thing that worked out of the box. Similarly, at some point we’ll be paying for names rather than functions. Here we’ve confused our needs with our wants. By being honest with what we need, what would be nice, what we can live without, how often we’ll use something, what if it breaks, is it disposable or a repairable, etc.. we can start to find our point of diminishing returns.

Value can mean a lot of things to a lot people. To those of us stretching dollars to make ends meet, a wrench from Lowe’s is too expensive compared to one from Harbor Freight. Likewise the Lowe’s wrench is a waste of dollars to a mechanic who can’t make their money if the tool regularly strips fasteners. How do we define value with so many variables?

Let’s take a look at standard wrenches, and how each of us might look at them. A wrench is a basic tool that allows us to turn a threaded fastener much tighter than we could otherwise. It does this by slipping over the fastener with minimal wiggle, and we rotate the handle to rotate the fastener. It’s a pretty simple concept, but there’s a lot more to these tools than what meets the eye.

One of the first things we notice when holding different wrenches is the length and thickness of them. Thinner wrenches let us get to fasteners where we might otherwise have to remove other things to get a tool in there, but can start to hurt our hands if we put a lot of effort into the handle. Thicker and wider handles lower the pressure we feel, making them more comfortable to use. How blocky the handles are and how rounded the edges are play a huge part in the ergonomics of our tools. Technically, any wrench that fits the fastener will do the job, but if we are doing this for hours every day compared to once a year, it will start to play a bigger factor in our tool selection.

One of the more overlooked concepts include how the wrench was built. The material we use, how we shape it, and the heat treatments used can dramatically change how well the wrench works. I used to bend wrenches trying to get a bolt out, which really stoked my ego for how strong I was (I wasn’t). Those cheap wrenches were made with really poor quality steel, and the factory making them generally heat treats those wrenches to be soft instead of stiff. The reason is simple - a poor quality metal that is heat treated to be stiff is brittle and may shatter, causing injury and a lawsuit, but a soft one will slowly bend. Forged wrenches can be made harder than cast wrenches, which allows the jaws of the wrench to stay parallel when more force is applied, and prevents distortion. This reduces the chance of rounding fasteners or bending handles.

The next step is understanding the differences in manufacturing. Cheap wrenches are usually cast, which means the steel was melted to a liquid, poured into a mold, and bam, there's a wrench. This allows for detailed parts and very high volume production at a low cost. Another way to make a wrench is forging. Here the steel is heated until it glows and beat it into the shape we want. This process can create stronger pieces, as the internal grain structure of the metal flows with the shape of the part we’re making. Forged wrenches tend to be stronger and more rigid than cast wrenches, and they are also more expensive to make.

Here’s where the wrenches really start to make a divergence - the actual dimensioning of the working ends of the wrench. In our cheap wrenches minimal machining is performed before it is packaged. Dimensioning of nicer wrenches takes place a little differently. After casting or forging, the ends of the wrenches are milled or broached to the exact size needed. This creates more precise fitments to the fastener, which helps to prevent the fastener from being rounded while making our work more efficient.

More expensive brands will generally provide even more options with their wrenches. Do you need a ratcheting, 4, 6, or 12 point box end? What about jaws with more of an angle, or long and short handle options? There are even wrenches designed to be used on soft metals or hard metals. Need a wrench that is bent to get around obstacles? Yup, those are a thing too. These options are extremely limited outside of the best brands, and we pay for it with our wallets to get those features. If these options help us pay the bills, or get work done faster, it might be worth the extra cash.

After this, the next thing that separates the tools is where we can buy them, and what warranties they carry. A lot of tools carry great warranties, but the best warranties are the ones we never have to use. If a mechanic has a broken tool, he needs a replacement very quickly before his livelihood is impacted. A tool truck will drive to the mechanic to sell and replace their tools, but it costs the mechanic a lot of money. I personally don’t need that wrench - while it may be the best, but I just need one that doesn't round fasteners easily.

It is entirely possible to have some of the best in one category, and some of the worst in another - and that’s just fine. Now that guardrails are in place, and diminishing returns are defined, let's flip this over to pistols in part 3.


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