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> When you say "substance" what you mean is physical goods The citation of AT&T and JetBlue by OP seems to disagree with this, so I don't necessarily agree wit

by eganist 10y ago

> When you say "substance" what you mean is physical goods The citation of AT&T and JetBlue by OP seems to disagree with this, so I don't necessarily agree with this reinterpretation of the OP's analysis. As an example, one could argue that companies involved in self-driving R&D could very easily meet this definition as a provider to the bottom-line of society as transportation to/from a location is a service not terribly dissimilar to providing data and communication. By that token, Tesla and soon Uber could soon fit this bill as service organizations (disregarding Tesla's manufacture of vehicles).

AndrewKemendo 10y ago
AT&T is fundamentally infrastructure, not just service. JetBlue while yes it is service, is also closer to infrastructure than it is concierge. I distinguish services vs infrastructure based on if they are fundamental needs, not how they are provided. So water treatment is technically a service, but it's a fundamental piece of life so it's infrastructure.
- randomdata 10y ago
  Are telecommunications and flight fundamental needs? Humans lived for hundreds of thousands of years without them. Yet I agree that they are infrastructure. On the other hand, humans have not lived for hundreds of thousands of years without food, yet I would consider McDonalds a service. Personally, I think the distinction is in how it is provided. The copper/fibre line to your home is what AT&T has to bring to the table. JetBlue brings their fancy flying machine. The water treatment plant has their water treatment system. While people are certainly involved in the process, the defining feature of these businesses are related to the machines/technology that they possess. On the other hand, McDonalds certainly has a kitchen, but so does everyone else. They are literally found in almost every home. What McDonalds, and restaurants in general, bring to the table is a person willing to do the cooking and other related activities for you. Because the defining feature is related to human labour (for now, at least), these are services.
ghaff 10y ago
I agree although I also don't know what "substance" is. If they're contributing to the monetary value of goods and services being sold to an end user, they're contributing to GDP. If they're not, they're not. Other than that--or by explicitly considering only manufactured goods for example--you're effectively making value judgements about what products and services contribute to society and which don't. You could equally as well argue (though I wouldn't) that the 50th new rebranded and repackaged laundry powder doesn't contribute either.
- neom 10y ago
  Yes I think it is a value judgement, hence it's just a silly theory that lives in my head. :)
- tedsanders 10y ago
  One definition of "substance" might be consumer surplus. Electricity provides massive utility to society, despite its relatively cheap price. Consumer surplus is not reflected in GDP, but it is certainly real and important.
neom 10y ago
Indeed, the comment above isn't quite what I meant. For example, one of the reasons I included Mondelez is that my theory includes the idea that in providing low cost commodity "food", families had other areas of the economy they could spend on (education, entertainment etc).
- rhizome 10y ago
  Societal benefits may be one thing, though I'd say for companies of this size it's only a side-effect of economies of scale, but as far as most of us experience them Mondelez is pretty standard CPG company. https://en.wikipedia.org/wiki/Fast-moving_consumer_goods https://en.wikipedia.org/wiki/Fast-moving_consumer_goods
  - neom 10y ago
    I was way more focused on Kraft than Mondelez - I mentioned Mondelez first because HN seems to want you to word things that way, but really, I was more thinking about Kraft as it's funny little dairy business from the 20s to 30s. :)
    - rhizome 10y ago
      There is no more "textbook CPG" than Kraft :)

by eganist 10y ago

AndrewKemendo 10y ago

AT&T is fundamentally infrastructure, not just service. JetBlue while yes it is service, is also closer to infrastructure than it is concierge. I distinguish services vs infrastructure based on if they are fundamental needs, not how they are provided. So water treatment is technically a service, but it's a fundamental piece of life so it's infrastructure.

randomdata 10y ago
Are telecommunications and flight fundamental needs? Humans lived for hundreds of thousands of years without them. Yet I agree that they are infrastructure. On the other hand, humans have not lived for hundreds of thousands of years without food, yet I would consider McDonalds a service. Personally, I think the distinction is in how it is provided. The copper/fibre line to your home is what AT&T has to bring to the table. JetBlue brings their fancy flying machine. The water treatment plant has their water treatment system. While people are certainly involved in the process, the defining feature of these businesses are related to the machines/technology that they possess. On the other hand, McDonalds certainly has a kitchen, but so does everyone else. They are literally found in almost every home. What McDonalds, and restaurants in general, bring to the table is a person willing to do the cooking and other related activities for you. Because the defining feature is related to human labour (for now, at least), these are services.

ghaff 10y ago

I agree although I also don't know what "substance" is. If they're contributing to the monetary value of goods and services being sold to an end user, they're contributing to GDP. If they're not, they're not. Other than that--or by explicitly considering only manufactured goods for example--you're effectively making value judgements about what products and services contribute to society and which don't. You could equally as well argue (though I wouldn't) that the 50th new rebranded and repackaged laundry powder doesn't contribute either.

neom 10y ago
Yes I think it is a value judgement, hence it's just a silly theory that lives in my head. :)
tedsanders 10y ago
One definition of "substance" might be consumer surplus. Electricity provides massive utility to society, despite its relatively cheap price. Consumer surplus is not reflected in GDP, but it is certainly real and important.

neom 10y ago

Indeed, the comment above isn't quite what I meant. For example, one of the reasons I included Mondelez is that my theory includes the idea that in providing low cost commodity "food", families had other areas of the economy they could spend on (education, entertainment etc).

rhizome 10y ago
Societal benefits may be one thing, though I'd say for companies of this size it's only a side-effect of economies of scale, but as far as most of us experience them Mondelez is pretty standard CPG company. https://en.wikipedia.org/wiki/Fast-moving_consumer_goods https://en.wikipedia.org/wiki/Fast-moving_consumer_goods
- neom 10y ago
  I was way more focused on Kraft than Mondelez - I mentioned Mondelez first because HN seems to want you to word things that way, but really, I was more thinking about Kraft as it's funny little dairy business from the 20s to 30s. :)
  - rhizome 10y ago
    There is no more "textbook CPG" than Kraft :)