The hottest Profitability Substack posts right now

And their main takeaways
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Data Update 5 for 2025: Profitability - The End Game for Business?

Musings on Markets • 479 implied HN points • 31 Jan 24
💼 Business Corporate Finance Profitability Investment strategy Market Analysis
  1. Businesses should focus on profitability as their main goal, not just growth. It's important to make money to cover expenses and create value for the future.
  2. Measuring profitability can be tricky because different measures tell different stories about a company's health. Companies need to be compared properly to understand their true performance.
  3. Most companies struggle to earn profits that exceed their costs of capital, showing it can be tough to succeed in the business world today. Even in a competitive market, many companies fall short.
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What’s up with…? - Part 1: Temu

Tech Buzz China Insider • 139 implied HN points • 22 Dec 23
💼 Business E-commerce Market Expansion Promotion Logistics Profitability
  1. Pinduoduo's cross-border platform Temu experienced rapid growth, reaching impressive sales numbers and expanding to new markets with strong user retention rates.
  2. Temu heavily invested in marketing and promotion, with a significant budget allocation for advertising and user acquisition, showcasing a focus on market expansion and customer reach.
  3. Logistics played a vital role in Temu's operations, with a well-defined shipping strategy to ensure timely deliveries and a wide product range provided by a large network of suppliers.

Data Update 5 for 2023: Pathways to Profitability

Musings on Markets • 439 implied HN points • 16 Feb 23
💰 Finance Profitability Investments Market Trends Economic Analysis Capital Structure
  1. A company's main goal is to make money, not just grow. Even businesses that do good need to be profitable to survive.
  2. Profit margins differ across industries and countries. Some sectors, like tech or energy, often show higher profits, while retail and airlines typically struggle.
  3. It's important for companies to earn more than their costs of capital. Many businesses are failing to meet this goal, meaning they need to rethink their financial strategies.

Japan Reality Check #4: In praise of the Salaryman CEO

Japan Optimist • 176 implied HN points • 25 Feb 23
💼 Business Leadership Corporate culture Performance Profitability
  1. Japanese Salaryman CEOs have shown extraordinary resilience and competence in delivering corporate economic value and profitability.
  2. Data shows that Japanese Salaryman CEOs have outperformed Wall Street Superstar CEOs in terms of profit increase without relying on rising sales.
  3. While Japanese Salaryman CEOs have significantly increased profits, their compensation has only risen modestly, maintaining a close link between performance and pay.

Platform Economics- Why Meta made a Profit and Uber did not [Finance Fridays]

Technology Made Simple • 159 implied HN points • 22 Jul 23
💰 Finance Platforms Economics Profitability Tech industry Monopoly
  1. Platform economics often prioritize scale over short-term profitability, relying on network effects to eventually generate revenue.
  2. Successful platforms like Facebook and YouTube maintained a competitive edge through extensive user profiles and built-in loyalty, unlike Uber.
  3. Uber's failure was attributed to factors like the ease of replicating its service, lack of customer loyalty, and the unrealistic expectations for profitability in the on-demand service industry.

Community Group Buying: the ‘US military vs the Red Army’

Tech Buzz China Insider • 39 implied HN points • 16 Feb 24
💼 Business E-commerce Market Analysis Competition Profitability
  1. Community group buying market in China is highly competitive, with Meituan and Pinduoduo leading the way. Meituan is compared to the 'US military' and Pinduoduo to the 'Red Army.'
  2. Demand for community group buying has increased by 30-40% post-pandemic, driven by low prices and consumption downgrade trends.
  3. Duoduo Maicai, Pinduoduo's CGB business, has shown significant growth and profitability, leveraging its main app's high traffic volume and cost-efficient product offerings.

IWG: A Wonderful Company at a Wonderful Price

Modern Value Investing • 39 implied HN points • 11 Feb 24
💰 Finance Investing Real Estate Marketplace Growth Profitability
  1. IWG has a solid legacy business model of providing flexible workspaces and is trading at a great price, making it an attractive investment option.
  2. IWG's Worka segment is a fast-growing and profitable marketplace business, showing solid growth and expected to generate significant revenue.
  3. IWG is transitioning to a capital-light model and aims to become a major player in managed and franchised office space, with significant growth potential in the untapped market of office real estate.

"No PM, no problem"

The SaaS Baton • 78 implied HN points • 01 Mar 23
💼 Business Hiring practices Product-Market Fit Profitability Remote work
  1. Sometimes having zero product/project managers can lead to faster feature shipping and more engaged developers.
  2. Consider hiring contractors before employees to save on salaries and gain access to specialist talents.
  3. In assessing product-market fit, look for metrics like revenue, conversion rates, and NPS, and focus on fixing the most challenging aspect for improvement.

Warren Buffett’s Rare Big Investing Mistake

Behavioral Value Investor • 148 implied HN points • 06 Aug 23
💰 Finance Investing Mistakes Valuation Profitability Lessons
  1. Even successful investors like Warren Buffett make mistakes, which is a crucial lesson for all investors.
  2. When investing, it's important to stick to your circle of competence to avoid big investing mistakes.
  3. Paying a high price for an investment with little room for error can be a risky move, highlighting the importance of a margin of safety.

A CLOSER LOOK: The Mid Year Earnings of 7 Big For-Profit Insurance Companies

HEALTH CARE un-covered • 219 implied HN points • 16 Aug 22
🏥 Health Politics Insurance Medicare Medicaid Profitability Government funding
  1. The largest for-profit insurance companies made $43.8 billion in profits and had $620.6 billion in revenue, mostly from taxpayer money. This shows how much they benefit financially from government programs.
  2. Three major insurers control 80% of the pharmacy benefit market. This means they have a huge influence over how prescription medications are managed and priced.
  3. A large number of Americans are underinsured, with 43.4% lacking sufficient coverage. This highlights a growing issue in healthcare, where many people struggle to afford medical care despite having insurance.

Changing Lanes: Li Auto's Drive from Green Plates to Pure Watts

Tech Buzz China Insider • 39 implied HN points • 15 Sep 23
💼 Business Electric Vehicles Automotive Industry Technology Trends Market Analysis Profitability
  1. Li Auto has shown impressive sales, profits, and stock performance, surpassing its competitors in the market.
  2. Li Auto specializes in extended-range electric vehicles (EREVs), combining electric and gasoline power for efficiency and range.
  3. Amidst challenges like license plate restrictions and charging infrastructure, EREVs offer automakers financial relief and cater to consumer needs.

Starbucks Shares Plunge After Sales, Earnings Miss

Dr.John B’s Newsletter • 8 HN points • 01 May 24
💼 Business Finance Sales Earnings Market Profitability
  1. Starbucks experienced a significant drop in sales and earnings, leading to a plunge in shares due to a 4% decrease in global comparable store sales
  2. The decrease in sales was particularly notable in China where competition with lower prices impacted transactions and average spend negatively
  3. Despite new store openings, Starbucks struggled to offset the declining sales in existing cafeterias due to various factors like colder weather, cautious consumers, and conflicts globally

Data Update 5 for 2022: The Bottom Line!

Musings on Markets • 119 implied HN points • 27 Feb 22
💼 Business Profitability Corporate Finance Market Trends Economic Impact Financial Analysis
  1. Profitability is key for business success, but it's important to dig deeper than just revenue growth. Companies need to focus on actual earnings and how well they can sustain profits in the long run.
  2. Different metrics help measure a company's profitability, including gross profit and net income. Understanding these can provide insights on how companies are doing across various sectors.
  3. Growth isn't always good; it requires careful investment that might affect immediate profits. Companies need to balance reinvestment with delivering returns to their investors.

1000 Skills Conference: Day Two Recap

Day One • 159 implied HN points • 26 Sep 20
💼 Business Skills Online Learning Profitability Productivity Sales
  1. Day Two of the 1000 Skills Conference focused on the importance of skills - learning online, profiting from skills, and combining skills for more income.
  2. Attendees emphasized the value of uniqueness to stand out, the need to master a skill before moving to others, and the importance of focusing on attention for productivity.
  3. Resources like 'Sell your Sawdust', 'The Rule Of Five', and 'The Sales Guide' were recommended to aid in skill development, productivity, and sales proficiency.

Uber is Finally … Profitable: What Drove This?

Gad’s Newsletter • 1 HN point • 11 Mar 24
💼 Business Economics Marketplace Regulation Labor Profitability
  1. Despite previous doubts, Uber has achieved profitability by moderating spending and efficiently managing its operations.
  2. Uber's profitability hinges on increasing their take-rate from customers, while the drivers are facing challenges with payment structures such as algorithm-based systems.
  3. Even though Uber is profitable, there are concerns about the sustainability of these profits due to potential regulatory changes impacting their business model and driver treatment.

The Ethics of Influencer Technology: Balancing Privacy, Profitability, and the Role of shipto.me

The SHIPTO.ME Blog • 1 HN point • 16 Jun 23
🕹 Technology Ethics Privacy Profitability Influencers Data
  1. In influencer technology, privacy and profitability are key concerns for users to consider.
  2. Influencers can manipulate behavior by endorsing products, sometimes resulting in negative outcomes for their audience.
  3. It's important to be cautious when using influencer platforms, follow genuine influencers, question content authenticity, and understand privacy policies.

How content is trapped

Joshua Gans' Newsletter • 0 implied HN points • 26 Oct 16
💼 Business Media Digitization Profitability Strategy Content
  1. Digitization exposes weak links in traditional content business models and breaks them, emphasizing the importance of understanding the connection between content and returns.
  2. Successful businesses recognize early the need to adapt and delink aspects of their operations to stay profitable in the digital age.
  3. Content providers need to focus on social elements and consumer value, not just information, to remain relevant and successful in the changing media landscape.

Snapchat chooses execution over control

Joshua Gans' Newsletter • 0 implied HN points • 13 Feb 17
💼 Business Strategy Innovation Entrepreneurship Competition Profitability
  1. Snapchat prioritizes execution over control to drive user engagement and product innovation.
  2. An execution strategy can be more profitable than a control strategy, as it allows for quicker market entry and cost-saving experiments.
  3. Snapchat's strategy mirrors Apple's approach of focusing on innovation rather than building barriers to entry, though profitability execution remains unproven.

OpenAI, profitability, and Sora

Power Platform News • 0 implied HN points • 25 Feb 24
🕹 Technology AI Profitability Video Generation Artificial Intelligence
  1. OpenAI faces challenges with profitability due to expensive product costs compared to revenue.
  2. Sora presents a solution for OpenAI through AI-generated videos that can reduce movie production costs significantly.
  3. Licensing Sora to studios via a deal with Azure could revolutionize the movie-making industry by making production more cost-effective.

Will Corporate Governance Reforms In Japan Lead to More Inward FDI?

Japan Economy Watch • 0 implied HN points • 18 Nov 21
💼 Business Corporate Governance Profitability Mergers & Acquisitions Market Trends
  1. American business leaders in Japan believe that corporate governance reforms could lead to more acquisitions of healthy Japanese businesses by foreign companies.
  2. Despite corporate governance reforms aiming for better efficiency and profitability, companies have not significantly divested or improved their core competencies.
  3. Recent data shows that despite improvements in profitability, it may be due to artificial factors rather than actual corporate efficiency gains.

Equal’s POV on Investing in Retail

Equal Ventures • 0 implied HN points • 21 Jun 23
💼 Business Investing Retail Technology Profitability
  1. VCs heavily invested in digital-first commerce, but rising costs and unprofitability among DTC brands show challenges in changing retail margins.
  2. The retail industry faced significant inventory challenges during the COVID-19 pandemic, highlighting the importance of effective inventory management for margins.
  3. There is a renewed focus on profitability and fundamentals within brands and retailers, with a trend towards optimizing margins through omnichannel strategies and managed marketplaces.

What SaaS metrics should a head of engineering track?

Brick by Brick • 0 implied HN points • 11 Mar 24
💼 Business Metrics Revenue Profitability Efficiency Startups
  1. Key SaaS metrics vital for an engineering leader: Focus on ARR, ACV, and TCV to gauge revenue streams effectively.
  2. Profitability metrics: Look at gross and operating margins, and free cash flow for late-stage companies to evaluate success.
  3. Efficiency tracking for startup growth: Monitor Cash Burn to Net New ARR, operational expenses per department relative to sales, to assess resource effectiveness.

Data Update 6 for 2020: Profitability, Returns and the value of Growth

Musings on Markets • 0 implied HN points • 21 Mar 20
💰 Finance Investment Valuation Profitability Growth Returns
  1. Good businesses can make profits and turn those profits into cash flow for investors. It's important to think about both profit and cash flow, especially during tough economic times.
  2. Growth, profitability, and reinvestment are crucial to a company's value. Companies that grow their revenue while managing costs effectively are usually the most successful.
  3. How well a company reinvests can affect its growth and profitability. Efficient reinvestment means more gains and better overall performance in the market.

How do you measure profitability?

Musings on Markets • 0 implied HN points • 15 Mar 10
💰 Finance Profitability Investments Health care Financial Analysis Market Trends Profitability Investments Health care Market Analysis Financial Metrics
  1. Dollar profits can sound impressive, but they don't tell the whole story. A big profit number doesn’t mean much if it’s tiny compared to total revenue or investment.
  2. Profit margins provide insight by showing profits as a percentage of revenue. However, comparing margins between different businesses isn't easy due to varying pricing strategies.
  3. Returns on investment, like return on equity, give a clear view of how well a company uses its money. This measure helps to evaluate profitability across different industries.

Good companies in bad businesses

Musings on Markets • 0 implied HN points • 17 Nov 08
💼 Business Corporate strategy Economics Profitability Market structure Industry Analysis Economics Corporate strategy Market Analysis Industry Trends Financial Performance
  1. Some businesses are really tough, even for great companies. For example, many car manufacturers struggle to make a profit.
  2. Certain industries, like airlines and automobiles, face structural issues that make it hard for companies to succeed consistently. This can be due to factors like competition and high legacy costs.
  3. For consumers, it's important that these companies eventually find a way to make money. We rely on cars and airlines, so it's beneficial for them to be profitable.

The Devil You Know is Better Than the Angel You Don't

Metarational • 0 implied HN points • 05 Jun 21
💼 Business Decision-making Relationships Profitability Society
  1. Predictability is crucial in social interactions - knowing the devil you know can be better than the angel you don't.
  2. Having a history or personal connection with someone can lead to profitable collaborations, even if they are generally inferior.
  3. Social and cultural structures that enhance predictability can create more scenarios for successful collaborations, even if they are arbitrary.