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"Profit is a solved problem: we know, to a pretty good approximation, how to make companies profitable." This whole article was somewhat laughable, but this ph

"Profit is a solved problem: we know, to a pretty good approximation, how to make companies profitable." This whole article was somewhat laughable, but this phrase in particular stood out to me.

k-mcgrady 14y ago
I think, until recently, that statement proved correct. You created a product or service, sold it for more than it cost to make/run, and voilá - profit. Companies didn't have millions of free 'customers' while they worked out a way to make money. And even when I look at the big web companies that spent years 'figuring out a business plan' it always ends the same way. They put advertising on the product (although it's a new type of advertising never seen before) and the battle is over. Most of the time, if you have an idea and can't figure out how it will make money, it's not worth pursuing as a business (unless you love the idea and you can afford the huge risk).
lhtbws 14y ago
Yeah. Whenever I hear anyone who isn't talking specifically about math or engineering say "X is a solved problem," it tends to seem more like they actually mean "X is an understood problem," which has quite the opposite meaning. If you say "The solution to the problem of profitability is for the company in question to sell goods/services for more than the cost of obtaining them," you're begging the question. All you've done is stated the problem again in different terms and called it the solution. True solutions let us cause the rectification of the problem. If I could literally guarantee that I'd be able to turn a profit before I even knew the nature of the company I was going to start, then I could claim the problem was solved.
snowwrestler 14y ago
For those wondering about the approximation, it is: "charge more for the widgets than it costs to make them." You can see why this is clearly a solved problem.

"Profit is a solved problem: we know, to a pretty good approximation, how to make companies profitable." This whole article was somewhat laughable, but this phrase in particular stood out to me.

k-mcgrady 14y ago

I think, until recently, that statement proved correct. You created a product or service, sold it for more than it cost to make/run, and voilá - profit. Companies didn't have millions of free 'customers' while they worked out a way to make money. And even when I look at the big web companies that spent years 'figuring out a business plan' it always ends the same way. They put advertising on the product (although it's a new type of advertising never seen before) and the battle is over. Most of the time, if you have an idea and can't figure out how it will make money, it's not worth pursuing as a business (unless you love the idea and you can afford the huge risk).

lhtbws 14y ago

Yeah. Whenever I hear anyone who isn't talking specifically about math or engineering say "X is a solved problem," it tends to seem more like they actually mean "X is an understood problem," which has quite the opposite meaning. If you say "The solution to the problem of profitability is for the company in question to sell goods/services for more than the cost of obtaining them," you're begging the question. All you've done is stated the problem again in different terms and called it the solution. True solutions let us cause the rectification of the problem. If I could literally guarantee that I'd be able to turn a profit before I even knew the nature of the company I was going to start, then I could claim the problem was solved.

snowwrestler 14y ago

For those wondering about the approximation, it is: "charge more for the widgets than it costs to make them." You can see why this is clearly a solved problem.