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If you can’t be profitable on 1 unit, you won’t be profitable on 1 million units either. Scale brings complexity, and complexity has its own cost.
by spaceman_2020 4y ago
If you can’t be profitable on 1 unit, you won’t be profitable on 1 million units either.
Scale brings complexity, and complexity has its own cost.
- sjtgraham 4y agoDoesn't make sense. If you have 10 engineers building a product and you sell one subscription for $100 you won't be profitable. When you sell a million you will have generated $100M, with have a far greater probability of being profitable.
- throwaw20221107 4y agoYa this is basic economics, fixed investment vs markup driven return.
- spaceman_2020 4y agoThat's software products that have marginal distribution costs. I'm talking about physical products and/or services. Delivering a single package to an individual has a very real cost that doesn't really go down with scale.
- bombolo 4y agoThis makes no sense. If a bar had 1 customer only, it should price drinks so that the entire rent and salaries were covered by that 1 customer. Which is not how it works in reality.
- esja 4y ago"We'll lose on every sale but make it up on volume" takes me right back to the dot com era. It's amazing what central banks can achieve when they really put their minds to it.
- spaceman_2020 4y agoThe responses to my statement just reconfirms my belief that all these startups and the people running them will never be profitable. Way too many clever "ackshually..." responses that keep confusing (maybe deliberately) the context of the problem.
- esja 4y agoThe same happened in the dot com era. They don’t understand the layers beneath them that make their businesses temporarily viable. Well, maybe their CFOs understand, but the rest of them either don’t, or have to pretend that they don’t.