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This is very easy to do when you are a person When you are a company (I speak as having worked in a trillion dollar company, a $10 billion one, and running a s
by switch11 6y ago
This is very easy to do when you are a person
When you are a company (I speak as having worked in a trillion dollar company, a $10 billion one, and running a startup right now)
1) Office leases which you can't get out of
2) Server costs and subscription services to keep the company running
3) Salaries for everyone
4) Marketing. This is a Catch 22 situation. You cut on marketing and earnings go down. However, money for marketing becomes scarcer and scarcer
5) If you have any debt you have to service
6) One time costs - Coronavirus CREATES costs also
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No one can plan for a Black Swan type event because it is a Black Swan type event
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Also please keep in mind that it is a competitive situation
You can't be super careful with money if all your competitors are throwing it away
Think about what competitors of We Work, Uber, Tesla ($423 million in carbon credits + $1.49 billion Accounts receivable + taking $36 million out of Full AutoPilot Driving revenue in this quarter) have to do
Can they be conservative? No
They have to compete
Then this (CoronaBlackSwan) happens
Now no one has money and lots of companies die out
- pmiller2 6y agoA pandemic is not a black swan event: > Besides, the pandemic was wholly predictable—he, like Bill Gates, Laurie Garrett, and others, had predicted it—a white swan if ever there was one. “We issued our warning that, effectively, you should kill it in the egg,” Taleb told Bloomberg. Governments “did not want to spend pennies in January; now they are going to spend trillions.” [0] Pandemics aren't some new thing. They've been happening probably since pathogens and parasites evolved, and they'll continue to happen as long as they exist. --- [0]: https://www.newyorker.com/news/daily-comment/the-pandemic-isnt-a-black-swan-but-a-portent-of-a-more-fragile-global-system https://www.newyorker.com/news/daily-comment/the-pandemic-is...
- s1artibartfast 6y agoYes, pandemics are to be expected. The impact and magnitude of response necessary for this one is not predictable. The last one that came close was over 100 years ago.
- pmiller2 6y agoYes, so that means it's well within the range of what should be expected, albeit probability weighted. This is a classic low probability, high impact event, which is precisely one of the things insurance is for.
- maerF0x0 6y ago"pandemic" is a big scary word that mostly describes the global distribution of a disease. The classical definition includes nothing about population immunity, virology or disease severity. Ebola was/is a big deal for the past 45 years off an on.
- pmiller2 6y agoYep. Let’s not forget HIV. We’ve had several flu pandemics in the past 100 years, as well.
- dragonwriter 6y ago> Ebola was/is a big deal for the past 45 years off an on. But never a pandemic (if Ebola retained it's deadliness and gained characteristics that allowed it to become a pandemic that would be, to put it mildly, very bad.)
- maerF0x0 6y agocorrect, that's what I'm trying to point out is that pandemic has nothing to do with severity. But when the media says "pandemic" the public reacts to an implied high severity