This is an often stated postulate, but I'm not sure I agree. Sure, making money is necessary for a company to survive, but it doesn't have to be an end goal, and imho it's detrimental when it is. The goal can and should be to make a great product, create and make available something that otherwise would not exist, improve some product or process, etc - money and company itself are or should be just a means to a goal like that.
And the measure of how well you are making a great product, creating something that would otherwise not exist, or improve some other product or process is how much your customers are willing to pay you for what you are doing. If you are creating value for other people, you are making money -- money is a measuring unit that quantifies transferable value.
>No, because that falls under the fallacy that every market is a perfect market, where none is.
No, it doesn't. We live in a stochastic world, not a deterministic one, and nothing perfectly fits any speculative model. There are always outliers and edge cases, and that's fine -- the world doesn't need to perfectly adhere to any model in order for the model to be more accurate than not in the general case.
And the proposition that business profits are largely aligned with consumer interests in the general case, even despite outliers to the contrary, is very obviously true.
> the world doesn't need to perfectly adhere to any model in order for the model to be more accurate than not in the general case.
But that's my point: the world is so different from that model that it becomes inaccurate. You might be privileged enough to have a good enough approximation of a perfect market, leading you to believe that the model stands, but you are not representative of the population. Not even close to the median.
> And the proposition that business profits are largely aligned with consumer interests in the general case, even despite outliers to the contrary, is very obviously true.
I don't know why I'm debating this in the hyper-capitalistic forum that Hacker News is, but no, business profits are not. If they were, no advertising would be necessary, because products would naturally be sold. If they were, every consumer would have access to everything. If they were, no lobbying by any company to soften laws seen as too restrictive would be necessary. If they were, companies would not emit a single gram of CO2.
The whole point of business profit is to profit. Aligning with consumer interests is lucky happenstance, not a necessity. A fringe outlier, as you say. You cannot say "it is true because I see it". It needs to be backed by strong analysis.
I don't think that this is true. There are plenty of businesses that make shitloads of money off of frustrating or downright crappy products because of captured markets, constrained customers, lack of transparency, and more.
Look at something like Dark Patterns. These make a business more money by making a product worse.
Profit is what remains when you subtract operating expenses from income. Payroll is an operating expense. Maximizing profit is not strictly necessary for a business to operate.
My point isn't that a company shouldn't optimize for profit. My point is that the supposed logical conclusion stating "if it doesn't optimize for profit, then it will die" needs to be backed up by strong arguments. There are myriads of examples of companies not optimizing for profit and still surviving, and there are myriads of examples of companies optimizing for profit and still going bust.
> and there are myriads of examples of companies optimizing for profit and still going bust.
Do you mean there are myriads of example of companies who say that they are optimizing for profit, but don't actually follow through in their actions? Humans do, indeed, have a penchant for saying one thing and then doing another. But if they are truly optimized for profit, how could they possibly go bust?
It is not an unconstrained optimization problem. The constraints in which the company operates might result in a feasible region where even the most profitable point is still a net loss.
Those constraints may of course be self-imposed, like e.g. choosing a market to operate in.
> It is not an unconstrained optimization problem.
Of course not. The constraints are exactly what you optimizing against. Choosing to operate in a market that is not capable of supporting profitability is not optimizing for profitability, though. One may claim to be optimizing for profitability, but actions speak louder than words.
Proof of what? Proof that non profitable companies go bust, which is what your quote says? Or proof that over optimising for employee happiness results in under optimising for profit, which you haven't quoted?
That's a wild statement that is going to need some strong proof