THE CAPACITY ALLOCATION ILLUSION

Summary from the TLDR Founders newsletter

The common practice of tracking engineering time spent on different initiatives fundamentally misunderstands how capacity works in software development. While executives ask "where did our money go?" based on hours worked, real capacity is built through long-term investments in everything from team psychological safety to codebase knowledge. The piece uses manufacturing analogies to show how focusing purely on time allocation ignores the complex systems that determine a team's true capability to deliver value.