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> The profit motive inherent to a public company does not seem compatible with that mission. You cannot have any kind of a company without profit. Period. I

> The profit motive inherent to a public company does not seem compatible with that mission. You cannot have any kind of a company without profit. Period. I am not sure where the vilification of profit comes from (not addressing you in particular but rather the general concept), its just silly. Companies have layers upon layers of costs in their financial equation. Employees and ongoing operational expenses being the easiest to understand. If you operate without profit, the company dies. The simplest visual for this might be that if no-profit means zero dollars in the bank account at the end of the year. After all, "no profit" or operation "near cost" would result in exactly this kind of a situation. Which would, in turn, kill the enterprise almost instantly. If you want a company to produce and evolve products (any kind, physical or otherwise), it must be profitable. Without profit there is no innovation or longevity. At best you get a slow painful death. In addition to this, the pandemic has to have taught everyone the other dimension of the necessity of profit. When things go wrong --for whatever reason, pandemic, economic downturn, market shifts, etc.-- a business must have sufficient financial backing, reserves and strength to navigate the storm and survive. Without this they would have to instantly lay off massive numbers of employees, shut down operations, cancel leases and contracts, etc. In short, if you (plural, not addressing the poster I am responding to) care a company --whether it is cause driven or just a good product company-- you have to care about them making a profit or watch them evaporate. Here's a challenge for anyone who does not believe this: Provide the names of ten companies of non-trivial scale who have operated with zero or near zero profit for, say, 25 years, without external donations or other financial inputs to make-up for the lack of profit. Just ten companies. If I am wrong, it should not be too hard to present such a list. Hint: Even charities have to operate at a profit. Without this they would not have people, offices, marketing and the means to perform their stated charitable objectives.

ceejayoz 5y ago
> Provide the names of ten companies of non-trivial scale who have operated with zero or near zero profit for, say, 25 years, without external donations or other financial inputs to make-up for the lack of profit. Most restaurants. Many did, indeed, "instantly lay off massive numbers of employees, shut down operations, cancel leases and contracts, etc." during the pandemic as a result. Amazon made basically no profit for two decades, as a fairly notable example. Every penny earned got plowed back into the business. Lots of revenue, lots of expenses, no profit. It wasn't until recently they turned the profit spigot on. https://www.ben-evans.com/benedictevans/2014/9/4/why-amazon-has-no-profits-and-why-it-works https://www.ben-evans.com/benedictevans/2014/9/4/why-amazon-... Uber didn't make its first profitable quarter for a decade. https://www.reuters.com/technology/uber-posts-first-small-adjusted-profit-ridership-rises-delivery-gets-more-2021-11-04/ https://www.reuters.com/technology/uber-posts-first-small-ad... I think you're mixing up profits with revenue. A charity that brings in $1M and spends $1M has no profit, but they can (theoretically) remain a going concern indefinitely at that rate.
- robomartin 5y ago
  Your example is a precise representation of just how little people understand business. Restaurants: Shitty business. Most are constantly gasping for air. Yet, they do make a profit, which they use to hire people, pay for supplies, rent, etc. and keep the doors open. If they do not make a profit their choices are reduced to two simple paths: Close the doors or go get money (loan or investor). A lot of restaurant operators are up to their necks in loans, second mortgages, etc. In many ways restaurants are the best example of why good profits are important. Those who do not generate substantial profits are nothing but a brutal slog. Those who do, thrive, grow and expand. Amazon: C'mon. Please. They plowed PROFITS back into the business. Their annual net revenue was zero or near zero for a long time. It should be way beyond self-evident that you can't grow a business like Amazon without profits. Are you suggesting Amazon grew WITHOUT PROFITS? Seriously?
  - et15 5y ago
    I think you're still confusing revenue and profits. This guide is a good overview of the difference: https://www.investopedia.com/ask/answers/122214/what-difference-between-revenue-and-profit.asp https://www.investopedia.com/ask/answers/122214/what-differe...
    - robomartin 5y ago
      I have self-funded, founded and run multiple businesses in the last 40 years. What I post does not come from a 30 second google session. It comes from having had significant skin in the game, succeeding and failing. Most people think they understand business. And most people have never run a non-trivial business. It's like trying to explain what it is like to fly like a bird without being a bird. Most simply can't get it because they have no context whatsoever. When things go bad and you have to mortgage your home and top-off your credit cards to keep people employed and keep the doors open, you understand things you cannot possibly comprehend any other way. I've been there. Be well.
      - SirSourdough 5y ago
door103 5y ago
> you have to care about them making a profit or watch them evaporate. There is a difference between making a profit and maximizing profit. A publicly traded company is legally bound to do the latter.
- robomartin 5y ago
  > There is a difference between making a profit and maximizing profit. A publicly traded company is legally bound to do the latter. That's a lie. There is NO such legal requirement at all. None. Google it. Here's a starting point: https://www.google.com/search?q=Are+U.S+companies+legally+obligated+to+maximize+profits+for+shareholders https://www.google.com/search?q=Are+U.S+companies+legally+ob...
  - door103 5y ago
    From your search, which contradicts your point: https://apexlg.com/are-the-managers-of-traditional-corporations-really-required-to-maximize-profits-to-shareholders-a-review-of-ebay-v-craiglist-et-al-in-the-argument-supporting-hybrid/ https://apexlg.com/are-the-managers-of-traditional-corporati...
regularfry 5y ago
> Even charities have to operate at a profit. Without this they would not have people, offices, marketing and the means to perform their stated charitable objectives. This is factually incorrect. Charities (at least in the UK) are legally prohibited from making a profit.
- robomartin 5y ago
  How do they pay for salaries, operating expenses, building rent, vehicle purchases, electricity, marketing, etc? They take a percentage of their income and use it to cover these expenses. Right? Well, this is semantics. A conventional business does exactly the same thing. They take a percentage of their income and use it to cover the cost of doing business. Laws for non-profits generally allow for such things. Which makes sense, because they would not be able to survive without being able to slice off some "profit" to stay alive and grow. If you've ever seen the massive church campuses in Texas you'd get a sense of the idea that this is, in fact, profit. The range a typical nonprofit spends on administrative or operating expenses is wide. I would say that 40% isn't rare, with 25% being fairly common. This tracks with the profit margin of small to medium for-profit businesses. In fact, there are millions of for profit businesses that do not enjoy such margins. The key legal distinction (at least in the US) seems to be that nonprofits cannot exist for the benefit of shareholders (no distributions). Other than that, they can easily spend 40% of what comes in on operations, grow cash in the bank and more.
  - ceejayoz 5y ago
    > How do they pay for salaries, operating expenses, building rent, vehicle purchases, electricity, marketing, etc? They take a percentage of their income and use it to cover these expenses. Right? Sure. Revenue minus expenses = profit/loss. "Net income", "bottom line", etc. Make more than you expend, and you've got a profit. Spend more than you make, and you've got a loss. Equalize them, and you've got no profit and no loss. Businesses can optimize for profit. Charities are allowed to have a profit, but they don't get to distribute it to shareholders like a business can; it stays with the charity. It's legal for a charity to have a rainy day fund and a positive bank balance, but their legal purpose is not to run it up. Churches in the US get funky at times, and I'm of the opinion that the IRS should be empowered to crack down the abuses of the non-profit status you highlight, but if they're spending their revenue on buildings, staff, etc., they're eating into their profits when they do so.

ceejayoz 5y ago

> Provide the names of ten companies of non-trivial scale who have operated with zero or near zero profit for, say, 25 years, without external donations or other financial inputs to make-up for the lack of profit. Most restaurants. Many did, indeed, "instantly lay off massive numbers of employees, shut down operations, cancel leases and contracts, etc." during the pandemic as a result. Amazon made basically no profit for two decades, as a fairly notable example. Every penny earned got plowed back into the business. Lots of revenue, lots of expenses, no profit. It wasn't until recently they turned the profit spigot on. https://www.ben-evans.com/benedictevans/2014/9/4/why-amazon-has-no-profits-and-why-it-works https://www.ben-evans.com/benedictevans/2014/9/4/why-amazon-... Uber didn't make its first profitable quarter for a decade. https://www.reuters.com/technology/uber-posts-first-small-adjusted-profit-ridership-rises-delivery-gets-more-2021-11-04/ https://www.reuters.com/technology/uber-posts-first-small-ad... I think you're mixing up profits with revenue. A charity that brings in $1M and spends $1M has no profit, but they can (theoretically) remain a going concern indefinitely at that rate.

robomartin 5y ago
Your example is a precise representation of just how little people understand business. Restaurants: Shitty business. Most are constantly gasping for air. Yet, they do make a profit, which they use to hire people, pay for supplies, rent, etc. and keep the doors open. If they do not make a profit their choices are reduced to two simple paths: Close the doors or go get money (loan or investor). A lot of restaurant operators are up to their necks in loans, second mortgages, etc. In many ways restaurants are the best example of why good profits are important. Those who do not generate substantial profits are nothing but a brutal slog. Those who do, thrive, grow and expand. Amazon: C'mon. Please. They plowed PROFITS back into the business. Their annual net revenue was zero or near zero for a long time. It should be way beyond self-evident that you can't grow a business like Amazon without profits. Are you suggesting Amazon grew WITHOUT PROFITS? Seriously?
- et15 5y ago
  I think you're still confusing revenue and profits. This guide is a good overview of the difference: https://www.investopedia.com/ask/answers/122214/what-difference-between-revenue-and-profit.asp https://www.investopedia.com/ask/answers/122214/what-differe...
  - robomartin 5y ago
    I have self-funded, founded and run multiple businesses in the last 40 years. What I post does not come from a 30 second google session. It comes from having had significant skin in the game, succeeding and failing. Most people think they understand business. And most people have never run a non-trivial business. It's like trying to explain what it is like to fly like a bird without being a bird. Most simply can't get it because they have no context whatsoever. When things go bad and you have to mortgage your home and top-off your credit cards to keep people employed and keep the doors open, you understand things you cannot possibly comprehend any other way. I've been there. Be well.
    - SirSourdough 5y ago

door103 5y ago

> you have to care about them making a profit or watch them evaporate. There is a difference between making a profit and maximizing profit. A publicly traded company is legally bound to do the latter.

robomartin 5y ago
> There is a difference between making a profit and maximizing profit. A publicly traded company is legally bound to do the latter. That's a lie. There is NO such legal requirement at all. None. Google it. Here's a starting point: https://www.google.com/search?q=Are+U.S+companies+legally+obligated+to+maximize+profits+for+shareholders https://www.google.com/search?q=Are+U.S+companies+legally+ob...
- door103 5y ago
  From your search, which contradicts your point: https://apexlg.com/are-the-managers-of-traditional-corporations-really-required-to-maximize-profits-to-shareholders-a-review-of-ebay-v-craiglist-et-al-in-the-argument-supporting-hybrid/ https://apexlg.com/are-the-managers-of-traditional-corporati...

regularfry 5y ago

> Even charities have to operate at a profit. Without this they would not have people, offices, marketing and the means to perform their stated charitable objectives. This is factually incorrect. Charities (at least in the UK) are legally prohibited from making a profit.

robomartin 5y ago
How do they pay for salaries, operating expenses, building rent, vehicle purchases, electricity, marketing, etc? They take a percentage of their income and use it to cover these expenses. Right? Well, this is semantics. A conventional business does exactly the same thing. They take a percentage of their income and use it to cover the cost of doing business. Laws for non-profits generally allow for such things. Which makes sense, because they would not be able to survive without being able to slice off some "profit" to stay alive and grow. If you've ever seen the massive church campuses in Texas you'd get a sense of the idea that this is, in fact, profit. The range a typical nonprofit spends on administrative or operating expenses is wide. I would say that 40% isn't rare, with 25% being fairly common. This tracks with the profit margin of small to medium for-profit businesses. In fact, there are millions of for profit businesses that do not enjoy such margins. The key legal distinction (at least in the US) seems to be that nonprofits cannot exist for the benefit of shareholders (no distributions). Other than that, they can easily spend 40% of what comes in on operations, grow cash in the bank and more.
- ceejayoz 5y ago
  > How do they pay for salaries, operating expenses, building rent, vehicle purchases, electricity, marketing, etc? They take a percentage of their income and use it to cover these expenses. Right? Sure. Revenue minus expenses = profit/loss. "Net income", "bottom line", etc. Make more than you expend, and you've got a profit. Spend more than you make, and you've got a loss. Equalize them, and you've got no profit and no loss. Businesses can optimize for profit. Charities are allowed to have a profit, but they don't get to distribute it to shareholders like a business can; it stays with the charity. It's legal for a charity to have a rainy day fund and a positive bank balance, but their legal purpose is not to run it up. Churches in the US get funky at times, and I'm of the opinion that the IRS should be empowered to crack down the abuses of the non-profit status you highlight, but if they're spending their revenue on buildings, staff, etc., they're eating into their profits when they do so.