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by hinkley 1207 days ago
I feel like I have to disagree, on the grounds that many companies mistakenly label indirect profit centers as 'cost centers' and end up cutting off their noses to spite their faces. They strangle R&D and get outclassed in the market. They strangle infrastructure and get nasty surprises that tarnish their reputation.

And then there's mistaking users for customers. If you're a McDonald's customer you might think their money comes from trading hamburgers for cash, and you'd be wrong on any number of fronts. If you're a McDonald's competitor, you would know that they make more money from fries, and way more money from selling soda (hence the discount for a meal). But if you're the McDonald's corporation, you know that you make most of your money from franchisees, who happen to sell burgers and fries and oceans of soda. You're providing logistics and real estate acumen for most of your money. The general public is their customer's customer.

I don't know if they still do but Burger King used to 'steal' McDonald's real estate acumen by building Burger Kings as close to the nearest McDonald's as they could manage. Let them get 10% or whatever higher profits by getting the correct corner lot in the right neighborhood instead of the incorrect lot in the right neighborhood, meanwhile we save tons of money on market research.

1 comments

This is exactly what I'm talking about. It can surprising why a business actually exists. It can be counterintuitive(i.e. the mcdonald's is actually a real estate company conundrum). Even the "Product Engineer" guy who can probably talk up a storm about the financials of what he is doing, but in a Fortune 500 business does he really understand how that rolls up to the company's strategy? Is it a side line, is the landscape in transition and this is a existential hail mary? At one point facebook made no money, then they made all their money from placement ads, last I checked they made it from video interstitials. Of their 50,000 employees how many really know the revenue breakdown and how it has changed over time
I used to work there. At one point, I guess the worker population got large enough that they calculated the odds of insider trading or leaking data got too big (I think they were right) and nearly everyone lost access to the dashboards that would give insight into that kind of question. Despite this, the FEC enforced trading windows persisted.
Really digging your insights. Do you have a blog or newsletter? I’d love to ask you to present to Product Managers at our org. Would you get in touch? @charlesw on twitter.