7 ms·

It's very smart of them to recognize that. The world is full of these weird business cases where people aren't aware of the actual product, like how Starbucks

It's very smart of them to recognize that. The world is full of these weird business cases where people aren't aware of the actual product, like how Starbucks US morphed from a coffee shop into an iced dessert drinks company that also incidentally sells hot coffee. Edit: Other fun examples - In the mid-2000s, Porsche was an incredibly successful hedge fund that also sold cars who tried to acquire VW using a short squeeze. Most US airlines are profitable frequently flier points companies that also operate airplanes to justify the program. Target US is a real estate company that operates also (profitable) stores.

VBprogrammer 7mo ago
Or Blockbuster being a massive real-estate company. Or McDonald's for that matter.
- pixl97 7mo ago
  Car manufacturers being financial/loan organizations is another.
  - rationalist 7mo ago
    RV companies are more-so that than car companies. RVs are put together by methheads and there are less protections (such as no lemon law for RVs) for the consumers. Many RVs spend there whole one year warranty period in the shop with no actual fixes being done and then the warranty runs out. The people that do hear about RV problems, buy new thinking that will be less problems, when in fact the newer RVs are the lower quality ones that have issues. There are YouTube channels dedicated to this phenomenon (https://youtube.com/@LizAmazing https://youtube.com/@LizAmazing), and why one famous consumer lawyer (Steve Lehto) says "You Must be INSANE to buy an RV These Days": https://youtube.com/watch?v=xElhTNS_xn8 https://youtube.com/watch?v=xElhTNS_xn8 A great video where one major manufacturer does not even properly VIN their RVs leading to a $600,000 fine given to one RV owner: https://youtube.com/watch?v=zGOANydJURQ https://youtube.com/watch?v=zGOANydJURQ
- neutronicus 7mo ago
  On the other hand, the naming of Blockbuster[1] makes more sense with that context. [1] https://en.wikipedia.org/wiki/Blockbusting https://en.wikipedia.org/wiki/Blockbusting
  - pc86 7mo ago
    Because Blockbuster Video played a pivotal role in early-1900s segregation in the United States? I think it's much more likely it's just a reference to extremely popular and economically successful movies but happy to be proven wrong.
    - saalweachter 7mo ago
      The movie term derives from a different piece of slang, a WWII term for a large bomb that could destroy an entire block. Before movies bombing was a bad thing, a successful movie was "exploding" like a blockbuster bomb.
    - MathMonkeyMan 6mo ago
      Yeah I heard it describes a movie where the line to get into the theater went around the block. edit: ah, but wiki disagrees <https://en.wikipedia.org/wiki/Blockbuster_(entertainment) https://en.wikipedia.org/wiki/Blockbuster_(entertainment)>
- ljm 7mo ago
  Similarly Wether spoons, the chain of pubs in the UK. More interestingly, they tend to set up in historically significant or listed buildings and as a result, preserve them. Not unusual to find a Spoons set up in an old 19th century bank or something.
estearum 7mo ago
Starbucks is also (one of?) the largest payment processors in the world, with also a perpetual like ~$2B float from its customers
matthewkayin 7mo ago
I don't know if the Starbucks example is quite the same as the band example. If anything, their focus on iced desserts shows that they know exactly what their audience wants and is paying for. When I think about the band shirts, I think about this time an indie game dev youtuber did a full breakdown of their different revenue streams. They were a "full time indie gamedev", but the overwhelming majority of their income came from gamedev Udemy courses. So really, they were an online course seller that used their gamedev youtube content to convince people to buy the courses.
- Forgeties79 7mo ago
  to add to this, the iced dessert drinks are still caffeinated, so they still fill the purported role of a Starbucks.
  - lokar 7mo ago
    Well, not the original role. That was to bring some americanized version of European/Italian coffee culture to the US. Serving espresso based drinks in a comfortable public cafe style setting. It was very popular for a long time. Busy cafes full of people, selling lots of drinks, opening new shops, etc.
- btilly 7mo ago
  The reality is that Starbucks is the world's biggest unregulated bank, with their claws in the real estate industry. Who got that way by selling the experience of hanging out in a convenient coffee shop. Their business has run into trouble a couple of times because MBA types in the company lost sight of this, then focused on trying to sell drinks efficiently. Thereby diluting the brand and business. If you've got 22 minutes, https://www.youtube.com/watch?v=Ym7YwFq8ZuM https://www.youtube.com/watch?v=Ym7YwFq8ZuM is a very informative walkthrough of the history and the business by the always funny youtuber, The Fat Electician. Highly recommended.
  - lokar 7mo ago
    IMO, they, like many other companies, were doomed by the constant chase for growth. Once they had a large share of "have a milk-coffee drink in a nice lounge" market, growth slowed. But having a large market share, good margins and growth that is the same as population/gdp (+/-) is just not acceptable. So they try to find a way to get more growth, even if it changes and perhaps kills what the business was.
hydrogen7800 7mo ago
Or that GM is a bank that also sells people the collateral for loans (i.e. cars).
cucumber3732842 7mo ago
Now do the International Code Council, and Harvard, and Unicef, and government departments, and, and, and..... The reason we don't evaluate things in this "measure what is actually goin on" manner is because the actual goings on are only able to go on as they do so long as a public image that emphasizes something else is maintained. People wouldn't go to starbucks in the manner they do if they thought of it as a sugary drink place.
cm2187 7mo ago
And McDonald’s is known to be primarily a real estate company. Berkshire Hathaway is meant to be an insurance company. Military aircraft manufacturers are really maintenance companies.
socalgal2 7mo ago
> Most US airlines are profitable frequently flier points companies that also operate airplanes to justify the program. Freakonomics Radio had a series about airlines. They claimed this was not true and that frequently flier points only accounted for 5% of profits. https://freakonomics.com/podcast-tag/freakonomics-radio-takes-to-the-skies/ https://freakonomics.com/podcast-tag/freakonomics-radio-take... WSJ said it was true: https://www.youtube.com/watch?v=mTTW8RDJUEE https://www.youtube.com/watch?v=mTTW8RDJUEE I don't know who to believe.
- SoftTalker 7mo ago
  The version I've heard is that airlines are credit card companies that also fly passengers on airplanes. Also the one about Target being a real-estate company I've also heard about McDonald's.
  - socalgal2 6mo ago
    My understanding is that's true for McDonald's. They own all the stores and rent them out. Target owns its stores but does not rent them out.
- nunez 6mo ago
  It's not true. I thought it was also, so I looked at United Airlines 2024 Annual Report to confirm or deny my position. [^0] If you look at their revenue sheet, you'll see that UAL made ~$51B from passenger revenue (tickets sold * available seats across their entire fleet) while they made ~$24B from "other revenue", which includes, amongst other things, annual fees from credit cards. Same with Delta, though they made ~$10B from their "other" revenue. [^1] However, it's a bit of a positive feedback loop situation. The "other" revenues in these 10-Ks don't tell the whole story. Airline frequent flyer programs have tiers with minimum flight and spend requirements per tier. This benefits both frequent flyers and VFR customers (visiting friends and relatives). If you travel a lot for work (frequent flyer), there are very heavy incentives to get to that top tier. Customer service at the highest tiers is eons better than what you'd get at lower tiers. You also get priority boarding, first-crack at upgrades, upgrade certificates that move you to the top of upgrade lists, and more. These benefits make air travel, which many people don't like doing, much more tolerable. If you're an infrequent flyer, getting to that airline's mid-grade tier usually gets you more free checked bags and priority boarding. Checked bags are EXPENSIVE after the first freebie (thanks, Southwest!) which is usually enough of a draw to get people to chase that status. (If you live near a hub, you can gamble and hope that the gate agent offers to check bags gate-side for free to speed up boarding, but that's not foolproof. Anyway, checking baggage is a fool's errand; one-bag for life!). Getting the airline's co-branded card usually provides bonuses that make it easier to hit those tiers. So you get the card and put all of your personal (and corporate, if your company allows it) expenses on the card. Airlines also have gotten very aggressive about pushing the card onto gen pop. You're almost certainly going to get hit with a 60-80k mile offer on every flight you take in the US for spending ~$3k on that airline's co-branded card, no matter the airline. (It's almost always enough for a round-trip ticket to some coveted location in the US, on an award flight, which are harder and harder to come by, but that's another topic for another post.) United flew 173M customers in 2024. $3k card spend from even 10% of those customers is $52M! And that's before you consider that most people will continue spending on credit cards after earning the spend benefit! (However, at $0.01/mile earn rate, the $14M worth of flights United would be beholden to is recorded as a "frequent flyer deferred revenue" liability. But, again, the chase for status and benefits would generate more revenue that's hard to forecast, though I'm sure the airlines have forecasting models in place.) If this interests you, and if you like math, "The Global Airline Industry" by Belobaba et. al. is a fantastic book that explains this and other peculiarities of how airlines work. This was recommended to me by an old colleague that ran a small airline. It's excellent. [^0] https://ir.united.com/static-files/d4c854c7-427c-49a9-8129-d43c97e5c14e https://ir.united.com/static-files/d4c854c7-427c-49a9-8129-d... [^1]: https://s2.q4cdn.com/181345880/files/doc_financials/2025/q4/DAL-12-31-2025-10K-2-10-26-Filed.pdf https://s2.q4cdn.com/181345880/files/doc_financials/2025/q4/...
nitwit005 6mo ago
> Target US is a real estate company that operates also (profitable) stores. They're exactly as much a real estate company than a mom & pop store that owns their space. They just have a lot of stores.

VBprogrammer 7mo ago

Or Blockbuster being a massive real-estate company. Or McDonald's for that matter.

pixl97 7mo ago
Car manufacturers being financial/loan organizations is another.
- rationalist 7mo ago
  RV companies are more-so that than car companies. RVs are put together by methheads and there are less protections (such as no lemon law for RVs) for the consumers. Many RVs spend there whole one year warranty period in the shop with no actual fixes being done and then the warranty runs out. The people that do hear about RV problems, buy new thinking that will be less problems, when in fact the newer RVs are the lower quality ones that have issues. There are YouTube channels dedicated to this phenomenon (https://youtube.com/@LizAmazing https://youtube.com/@LizAmazing), and why one famous consumer lawyer (Steve Lehto) says "You Must be INSANE to buy an RV These Days": https://youtube.com/watch?v=xElhTNS_xn8 https://youtube.com/watch?v=xElhTNS_xn8 A great video where one major manufacturer does not even properly VIN their RVs leading to a $600,000 fine given to one RV owner: https://youtube.com/watch?v=zGOANydJURQ https://youtube.com/watch?v=zGOANydJURQ
neutronicus 7mo ago
On the other hand, the naming of Blockbuster[1] makes more sense with that context. [1] https://en.wikipedia.org/wiki/Blockbusting https://en.wikipedia.org/wiki/Blockbusting
- pc86 7mo ago
  Because Blockbuster Video played a pivotal role in early-1900s segregation in the United States? I think it's much more likely it's just a reference to extremely popular and economically successful movies but happy to be proven wrong.
  - saalweachter 7mo ago
    The movie term derives from a different piece of slang, a WWII term for a large bomb that could destroy an entire block. Before movies bombing was a bad thing, a successful movie was "exploding" like a blockbuster bomb.
  - MathMonkeyMan 6mo ago
    Yeah I heard it describes a movie where the line to get into the theater went around the block. edit: ah, but wiki disagrees <https://en.wikipedia.org/wiki/Blockbuster_(entertainment) https://en.wikipedia.org/wiki/Blockbuster_(entertainment)>
ljm 7mo ago
Similarly Wether spoons, the chain of pubs in the UK. More interestingly, they tend to set up in historically significant or listed buildings and as a result, preserve them. Not unusual to find a Spoons set up in an old 19th century bank or something.

estearum 7mo ago

Starbucks is also (one of?) the largest payment processors in the world, with also a perpetual like ~$2B float from its customers

matthewkayin 7mo ago

I don't know if the Starbucks example is quite the same as the band example. If anything, their focus on iced desserts shows that they know exactly what their audience wants and is paying for. When I think about the band shirts, I think about this time an indie game dev youtuber did a full breakdown of their different revenue streams. They were a "full time indie gamedev", but the overwhelming majority of their income came from gamedev Udemy courses. So really, they were an online course seller that used their gamedev youtube content to convince people to buy the courses.

Forgeties79 7mo ago
to add to this, the iced dessert drinks are still caffeinated, so they still fill the purported role of a Starbucks.
- lokar 7mo ago
  Well, not the original role. That was to bring some americanized version of European/Italian coffee culture to the US. Serving espresso based drinks in a comfortable public cafe style setting. It was very popular for a long time. Busy cafes full of people, selling lots of drinks, opening new shops, etc.
btilly 7mo ago
The reality is that Starbucks is the world's biggest unregulated bank, with their claws in the real estate industry. Who got that way by selling the experience of hanging out in a convenient coffee shop. Their business has run into trouble a couple of times because MBA types in the company lost sight of this, then focused on trying to sell drinks efficiently. Thereby diluting the brand and business. If you've got 22 minutes, https://www.youtube.com/watch?v=Ym7YwFq8ZuM https://www.youtube.com/watch?v=Ym7YwFq8ZuM is a very informative walkthrough of the history and the business by the always funny youtuber, The Fat Electician. Highly recommended.
- lokar 7mo ago
  IMO, they, like many other companies, were doomed by the constant chase for growth. Once they had a large share of "have a milk-coffee drink in a nice lounge" market, growth slowed. But having a large market share, good margins and growth that is the same as population/gdp (+/-) is just not acceptable. So they try to find a way to get more growth, even if it changes and perhaps kills what the business was.

hydrogen7800 7mo ago

Or that GM is a bank that also sells people the collateral for loans (i.e. cars).

cucumber3732842 7mo ago

Now do the International Code Council, and Harvard, and Unicef, and government departments, and, and, and..... The reason we don't evaluate things in this "measure what is actually goin on" manner is because the actual goings on are only able to go on as they do so long as a public image that emphasizes something else is maintained. People wouldn't go to starbucks in the manner they do if they thought of it as a sugary drink place.

cm2187 7mo ago

And McDonald’s is known to be primarily a real estate company. Berkshire Hathaway is meant to be an insurance company. Military aircraft manufacturers are really maintenance companies.

socalgal2 7mo ago

> Most US airlines are profitable frequently flier points companies that also operate airplanes to justify the program. Freakonomics Radio had a series about airlines. They claimed this was not true and that frequently flier points only accounted for 5% of profits. https://freakonomics.com/podcast-tag/freakonomics-radio-takes-to-the-skies/ https://freakonomics.com/podcast-tag/freakonomics-radio-take... WSJ said it was true: https://www.youtube.com/watch?v=mTTW8RDJUEE https://www.youtube.com/watch?v=mTTW8RDJUEE I don't know who to believe.

SoftTalker 7mo ago
The version I've heard is that airlines are credit card companies that also fly passengers on airplanes. Also the one about Target being a real-estate company I've also heard about McDonald's.
- socalgal2 6mo ago
  My understanding is that's true for McDonald's. They own all the stores and rent them out. Target owns its stores but does not rent them out.
nunez 6mo ago
It's not true. I thought it was also, so I looked at United Airlines 2024 Annual Report to confirm or deny my position. [^0] If you look at their revenue sheet, you'll see that UAL made ~$51B from passenger revenue (tickets sold * available seats across their entire fleet) while they made ~$24B from "other revenue", which includes, amongst other things, annual fees from credit cards. Same with Delta, though they made ~$10B from their "other" revenue. [^1] However, it's a bit of a positive feedback loop situation. The "other" revenues in these 10-Ks don't tell the whole story. Airline frequent flyer programs have tiers with minimum flight and spend requirements per tier. This benefits both frequent flyers and VFR customers (visiting friends and relatives). If you travel a lot for work (frequent flyer), there are very heavy incentives to get to that top tier. Customer service at the highest tiers is eons better than what you'd get at lower tiers. You also get priority boarding, first-crack at upgrades, upgrade certificates that move you to the top of upgrade lists, and more. These benefits make air travel, which many people don't like doing, much more tolerable. If you're an infrequent flyer, getting to that airline's mid-grade tier usually gets you more free checked bags and priority boarding. Checked bags are EXPENSIVE after the first freebie (thanks, Southwest!) which is usually enough of a draw to get people to chase that status. (If you live near a hub, you can gamble and hope that the gate agent offers to check bags gate-side for free to speed up boarding, but that's not foolproof. Anyway, checking baggage is a fool's errand; one-bag for life!). Getting the airline's co-branded card usually provides bonuses that make it easier to hit those tiers. So you get the card and put all of your personal (and corporate, if your company allows it) expenses on the card. Airlines also have gotten very aggressive about pushing the card onto gen pop. You're almost certainly going to get hit with a 60-80k mile offer on every flight you take in the US for spending ~$3k on that airline's co-branded card, no matter the airline. (It's almost always enough for a round-trip ticket to some coveted location in the US, on an award flight, which are harder and harder to come by, but that's another topic for another post.) United flew 173M customers in 2024. $3k card spend from even 10% of those customers is $52M! And that's before you consider that most people will continue spending on credit cards after earning the spend benefit! (However, at $0.01/mile earn rate, the $14M worth of flights United would be beholden to is recorded as a "frequent flyer deferred revenue" liability. But, again, the chase for status and benefits would generate more revenue that's hard to forecast, though I'm sure the airlines have forecasting models in place.) If this interests you, and if you like math, "The Global Airline Industry" by Belobaba et. al. is a fantastic book that explains this and other peculiarities of how airlines work. This was recommended to me by an old colleague that ran a small airline. It's excellent. [^0] https://ir.united.com/static-files/d4c854c7-427c-49a9-8129-d43c97e5c14e https://ir.united.com/static-files/d4c854c7-427c-49a9-8129-d... [^1]: https://s2.q4cdn.com/181345880/files/doc_financials/2025/q4/DAL-12-31-2025-10K-2-10-26-Filed.pdf https://s2.q4cdn.com/181345880/files/doc_financials/2025/q4/...

nitwit005 6mo ago

> Target US is a real estate company that operates also (profitable) stores. They're exactly as much a real estate company than a mom & pop store that owns their space. They just have a lot of stores.