3 ms·

"they had, in fact, been able to acquire vast amounts of wood for $50 a cord, and they’d been able to sell all they had for $40 a cord. How could they be broke

• ZeroGravitas 10y ago
  It's not brilliantly told, and not great material but, yes, that's the joke.
• shostack 10y ago
  While I get the joke, the question is accurate. If I had $1000 and bought 50 cords of wood at $50/cord, and could only sell then for $40/cord, I'm left with $800. I took a $200 loss, but I'm hardly broke. I'd go so far as to argue that this is a common occurrence in business when they haven't identified scalable marketing channels. Often you have to spend at a loss to gather data, optimize your efforts, and THEN hopefully make a profit. So if I can take that remaining $800, optimize my efforts, and sell them for $51/cord moving forward (assuming no further optimizations), it will take me a little bit to earn my initial cash back, but I'm in essence printing money at that point.
  • wargame 10y ago
    I took it to mean, that they had to buy more to cut costs, fuel (less trips), economies of scale etc. Your way is interesting!
    • shostack 10y ago
      Heh, well, I'm a marketer, so that model is the basis of my job. It is very rare to be profitable right off the bat. A lot of times you hear all the success stories on how a company hit viral growth, but what you don't always hear are how many of their strategies and tactics bombed and were tossed.