The War on Information

[sexobon]

Originally Posted by glatt

"There's no such thing as a business." - Elon Musk

I think Elon Musk is proof that business isn't necessarily about profits. It can be about achieving other goals.

That's not what I take away from the Elon Musk example. His businesses are for-profit and the prognosis is poor for him to accomplish his goals if he doesn't realize a profit. I think that business can be so much more than just profit; but, the profit needs to be there.

Neil deGrasse Tyson:

... The delusion that relates to private spaceflight isn’t really what you’re describing. They’re big dreams, and I don’t have any problems with people dreaming. Mars One, let them dream. That’s not the delusion. The delusion is thinking that SpaceX is going to lead the space frontier. That’s just not going to happen, and it’s not going to happen for three really good reasons: One, it is very expensive. Two, it is very dangerous to do it first. Three, there is essentially no return on that investment that you’ve put in for having done it first. So if you’re going to bring in investors or venture capitalists and say, "Hey, I have an idea, I want to put the first humans on Mars." They’ll ask, "How much will it cost?" You say, "A lot." They’ll ask, "Is it dangerous?" You’ll say, "Yes, people will probably die." They’ll ask, "What’s the return on investment?" and you’ll say "Probably nothing, initially." It’s a five-minute meeting. Corporations need business models, and they need to satisfy shareholders, public or private. ...

... So what is SpaceX doing now? They’re bringing cargo back and forth to the space station, as should have been happening decades ago. You don’t need NASA to move cargo, you get NASA to do the things that have never been done before. And then when they do it enough and there’s a routine, then you farm it off to private enterprise, which can actually do it more efficiently than you can, and presumably make a buck for having done so. ...

[xoxoxoBruce]

All those enthusiastic people Musk hires have to be paid. They may work for less to be part of it, but still get paid. That money comes from profits or Musk. If there is no profit, it becomes a rich mans hobby or history.

[Happy Monkey]

Originally Posted by sexobon

I think that business can be so much more than just profit; but, the profit needs to be there.

The distinction is whether profit is a means or an end.

[xoxoxoBruce]

But in the end profit must happen unless you have other means.

[tw]

Originally Posted by sexobon

That's not what I take away from the Elon Musk example. His businesses are for-profit and the prognosis is poor for him to accomplish his goals if he doesn't realize a profit.

Read what he said. He had no idea if his endeavors would be profitable. He did not care. He takes risks on ideas that business school graduates automatically declare unprofitable - and therefore fear and stifle.

Great entrepreneurs do that. They have no idea if it will be profitable. But it might work. Nine out of ten Silicon Valley businesses fail. Great ideas rarely create a profit. Therefore the Valley is extremely profitable and successful. Profits are not the purpose. Product is everything.

Elon Musk has a higher percentages of success - because he attempts ideas / concepts that are not profitable on any spread sheet. Howard Hughes and Sir Richard Branson did same. So did George Soros and Albert Blumenthal. Or Jeff Bezos.

In every case, they had no idea if it would be profitable. And did not care. They only viewed the product to decide if a risk was worth it. They did not do it for the wealth. They did it for what most everyone works for - accomplishment. Again, money is a reward - not the purpose. Some do not even demand a reward - ie Jimmy Wales.

In every case, the purpose was the product - a personal accomplishment. Even Ayn Rand books make that point. Many foolishly think it is only about profit. When the greedy took over society and innovations, then workers literally walked off the job in frustration. They could not do their job (ie engineers in frustration abandoned their train in a tunnel. So passengers later died - Atlas Shrugged).

Also why communism fails. People are denied what they want most - accomplishment. That is not money. Money is farther down the list - ie #3 or #5). People work first and foremost for accomplishment. They expect a just reward. It need not even be massive. Since reward is not the purpose.

Bill Gates did not quit school to become rich. He was in a hurry to accomplish something in computers. He did not know what. He knew opportunity existed to accomplish something. He became rich only because he stumbled into successful products.

When replaced by someone who only wanted to make profits, Steve Ballmer, well Microsoft suffered almost ten years of defective or mediocre products. Because Ballmer wanted profits - not better products. Ballmer had to leave to save Microsoft.

Or Wantanabe wanted to make Toyota the world's #1 automaker - to increase profits. So Toyota's sterling quality image was tarnished by massive defects including Camry anti-lock brakes and defective V-8 engines in most all Tundra pickups. Toyoda said there are five steps to bankruptcy. Toyota was already at step 3. We know why Wantanabe only wanted to increase profits. Toyoda would spend most of the next ten years undoing disasters created by someone who only wanted to make profits.

We know Intel's management has long never made decisions based in profits. Intel recently risked the entire company because their products did not meet Moore's law. We all know what happened when they risked everything to maintain product advancement. Intel CPUs now dominate. And AMD was facing bankruptcy. AMD took a profitable strategy. How did that work out?

These well understood principles require more than a soundbyte to comprehend. Many are only educated in what soundbytes and business school philosophies have ordered them to believe. So they foolishly assume the purpose of a business is profits - screw the product - as both communism and the mafia believe.

Purpose of every company that makes America great - better products. Purpose of so many companies that are dragging America down (ie Sears, Radio Shack, big steel, coal industry) - profits.