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You forgot the part about disregarding laws/regulations and trying to grow fast enough so that by the time the regulators start to apply pressure you have enoug

You forgot the part about disregarding laws/regulations and trying to grow fast enough so that by the time the regulators start to apply pressure you have enough money and clout to fight back, all while preventing the smaller guys from doing the same thing you did. Not saying that WeWork is doing that, but it's definitely a time-honored Silicon Valley approach. Just look at the recent faux pas from Robinhood with their "checking & savings" accounts that got them bitch slapped nearly instantaneously by regulators, forcing Robinhood to withdraw the announcement and update it to a "cash management" account with details to follow. Same for companies like Amazon. Grow super fast and ignore tax laws regarding nexus so you don't pay sales tax. And run a massive loss for years on end until you can figure out how to subsidize your losses through another profitable venture which you hope to achieve. They did with their AWS/cloud business and that makes the company as a whole barely profitable. But subsidizing your massive retail business losses with your high cloud margins is supposedly illegal. Number of regulators anywhere to be found? Zero. And don't forget to have an advantage against all the third party sellers because you can undercut them since you also sell millions of products and don't face the platform/marketplace fees, equating to illegal competition. Must be nice to be a big player.

stevehawk 8y ago
Amazon was not unprofitable. They just constantly reinvested their profits back into their company instead of hording cash.
- jvagner 8y ago
  This misconception, or common statement, will never go away. You'll have occasion to post this sentence forever.
- Spooky23 8y ago
  That’s called losing money. Amazon has to make those investments to continue the rocket ship growth that justifies the share price. Once the growth stops, boom.
- ralph84 8y ago
  Amazon was certainly unprofitable for their first 15 years or so. As recently as 2009 they had negative retained earnings on their balance sheet.
- turc1656 8y ago
  Amazon was most definitely unprofitable until the last few years as a whole. They just continually went back to investors asking for more money with the promise that they'll eventually solidify profits on the books.
gamblor956 8y ago
Same for companies like Amazon. Grow super fast and ignore tax laws regarding nexus so you don't pay sales tax. Need to point out that Amazon did not ignore tax laws regarding nexus. They took advantage of a Supreme Court decision on nexus laws (Quill) that resulted in them not having nexus in most states. They were forced to change their stance because at some point it was clear that they had surpassed the Quill factors that had earlier protected them. Moreover, you have the order of subsidies wrong. Amazon subsidized AWS with its retail earnings. The reason Amazon didn't show profits for years was because it reinvested its gross sales income in building up AWS and other ventures. But the other stuff about third party sellers, etc. is spot on.
- sharemywin 8y ago
  Was AWS subsidized with retail earnings or they were flush with investor cash which allowed them to invest in AWS? They also bought a huge warehouse footprint, too.
- turc1656 8y ago
  If you look at their SEC filings, it is clear that recently (I last looked early in 2018 or late 2017), the retail business was listed as having huge losses. Losses on the order of 15-20% of gross revenue! Meanwhile, AWS was highly profitable at this time and was the reason the company as a whole was finally booking profits with margins of a paltry ~1.3% or so, if I recall correctly. The retail business has never been profitable because of the huge costs of running all those logistics and warehouses and shipping (even with their rock bottom shipping costs). You may be right about Quill. I don't know enough about it. But regardless, at some point it's clear they surpassed the guidelines of Quill and became liable and are to this day not complying with the law in my opinion.
deleted 8y ago
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mikefivedeuce 8y ago
In some ways they are. The WeLive brand takes liberties with zoning laws that are in place to prevent SROs, for example. I wouldn't call it disregarding laws/regulations but they are potentially violating the spirit of those restrictions. It's not unique to WeLive - all of the co-living companies are doing similar things.
wbl 8y ago
There is nothing illegal about store brands.

stevehawk 8y ago

Amazon was not unprofitable. They just constantly reinvested their profits back into their company instead of hording cash.

jvagner 8y ago
This misconception, or common statement, will never go away. You'll have occasion to post this sentence forever.
Spooky23 8y ago
That’s called losing money. Amazon has to make those investments to continue the rocket ship growth that justifies the share price. Once the growth stops, boom.
ralph84 8y ago
Amazon was certainly unprofitable for their first 15 years or so. As recently as 2009 they had negative retained earnings on their balance sheet.
turc1656 8y ago
Amazon was most definitely unprofitable until the last few years as a whole. They just continually went back to investors asking for more money with the promise that they'll eventually solidify profits on the books.

gamblor956 8y ago

Same for companies like Amazon. Grow super fast and ignore tax laws regarding nexus so you don't pay sales tax. Need to point out that Amazon did not ignore tax laws regarding nexus. They took advantage of a Supreme Court decision on nexus laws (Quill) that resulted in them not having nexus in most states. They were forced to change their stance because at some point it was clear that they had surpassed the Quill factors that had earlier protected them. Moreover, you have the order of subsidies wrong. Amazon subsidized AWS with its retail earnings. The reason Amazon didn't show profits for years was because it reinvested its gross sales income in building up AWS and other ventures. But the other stuff about third party sellers, etc. is spot on.

sharemywin 8y ago
Was AWS subsidized with retail earnings or they were flush with investor cash which allowed them to invest in AWS? They also bought a huge warehouse footprint, too.
turc1656 8y ago
If you look at their SEC filings, it is clear that recently (I last looked early in 2018 or late 2017), the retail business was listed as having huge losses. Losses on the order of 15-20% of gross revenue! Meanwhile, AWS was highly profitable at this time and was the reason the company as a whole was finally booking profits with margins of a paltry ~1.3% or so, if I recall correctly. The retail business has never been profitable because of the huge costs of running all those logistics and warehouses and shipping (even with their rock bottom shipping costs). You may be right about Quill. I don't know enough about it. But regardless, at some point it's clear they surpassed the guidelines of Quill and became liable and are to this day not complying with the law in my opinion.

deleted 8y ago

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mikefivedeuce 8y ago

In some ways they are. The WeLive brand takes liberties with zoning laws that are in place to prevent SROs, for example. I wouldn't call it disregarding laws/regulations but they are potentially violating the spirit of those restrictions. It's not unique to WeLive - all of the co-living companies are doing similar things.

wbl 8y ago

There is nothing illegal about store brands.