Tuesday, November 12, 2013

Tatooed on your forehead, backwards

It should be for anyone in business (from Eugene Wei, thanks to NC State's Craig Newmark) so you see it every time you look in a mirror;
One thing I would note is that at Amazon, or at least when I was there, we cared about cash flow most of all.
Profits are an accounting construct (and for taxation). Wei has this right;
But to me, a profitless business model is one in which it costs you $2 to make a glass of lemonade but you have to sell it for $1 a glass at your lemonade stand. But if you sell a glass of lemonade for $2 and it only costs you $1 to make it, and you decide business is so great you're going to build a lemonade stand on every street corner in the world so you can eventually afford to move humanity into outer space or buy a newspaper in your spare time, and that requires you to invest all your profits in buying up some lemon fields and timber to set up lemonade franchises on every street corner, that sounds like a many things to me, but it doesn't sound like a charitable organization. 
Though most businesses do in fact end up having been charitable organizations; for its employees and customers. No one can know in advance, which will be the exceptions.

But, here's a bold prediction, this plan will fail (it always has, everywhere it's been tried);
The president himself has pointed out that his roadmap is based on late President Hugo Chávez's Government Plan for 2013-2019. Maduro has stressed the need for a "radical suppression of the logic of capital, which must be completed step by step."
The results suggest that the socialist project, centered on the displacement of the private sector, has set the basis for a model where the country de-industrializes and practically exports oil only. Meanwhile, imports shoot up and the State hands out oil revenues by selling US dollars at a low price, increasing the public sector's payroll, and granting subsidies.

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