Ask HN: What problems don't have a profitable business solution?

https://news.ycombinator.com/item?id=15910215

by ssono • 9 years ago

29 41 9 years ago

news.ycombinator.com

Are there problems that by nature can't be solved by businesses because they aren't profitable? What are they? How should they be approached?

trcollinson2• 9 years ago

There are degrees of profitability. Some businesses aren't profitable from a VC standpoint but are by a lifestyle business standpoint. Some businesses aren't profitable from a small business workforce standpoint but are profitable from a single person workforce standpoint. Some businesses aren't profitable from a certain geographical and political standpoint but are profitable from a different geographical and political standpoint (United States vs. China, and visa versa, for example).

I'll give you an example. A friend of mine sells small (US Quarter sized) stickers in sheets to Walmart and Walgreens and a few other smaller retailers in a small geographic area. He makes right about $1,000,000.00 a year in net profit (in stickers, I kid you not). This business is very profitable for himself. His business would not be profitable to a VC or a Incubator because it does not scale well and has certain risks associated with it. But he's quite happy with it.

He had a problem recently. Packaging the stickers (literally pulling the sheets off of rolls and putting them into self sealing plastic baggies) was costing him too much. Not in actual packaging costs but in finding reliable labor that could complete the task in a timely fashion so he could make his production deadlines. Solution: I made a very small business packaging the stickers for him at $0.06 per completed package. Now he can worry about the sales of his stickers and other business needs he has and I can worry about making sure the packaging is taken care of on time. The whole business will make around $120,000.00 a year gross. I will net far less than that. Is that profitable? Not from a VC standpoint. Not from a single owner standpoint (I could live on that but I don't want to). But... my daughter and her friends who want work while being in college full time find the work very fulfilling and very profitable.

So, profitability is a bit of a weird thing to ask about. We need a lot more information if you'd like us to answer what types of currently unprofitable business ventures might be solvable by you.

nicodjimenez4• 9 years ago

"Some businesses aren't profitable from a VC standpoint but are by a lifestyle business standpoint. Some businesses aren't profitable from a small business workforce standpoint but are profitable from a single person workforce standpoint."

well said, the stickers anecdote is amazing by the way.

trcollinson2• 9 years ago

I was just as amazed when I figured out what he did. Talk about the literal “millionaire next door”. Stickers! Who knew?

eesmith5• 9 years ago

There is an excess of CO2 in the atmosphere and the oceans, leading to global warming and ocean acidification.

There hasn't been a profitable way to reduce that excess. It doesn't appear like there will be a profitable way.

danieltillett5• 9 years ago

Actually someone has worked out a way of making a profit from reducing CO2 by causing algal blooms in the deep ocean via phosphate fertilization [0]. The basic concept is you use the blooms to support fisheries that provide the profit - fish are expensive these days.

0.https://en.wikipedia.org/wiki/Ocean_fertilization#Phosphorus

eesmith5• 9 years ago

I don't think it's economically feasible. The amount of CO2 reduction needed will drop the cost of fish enormously, such that there isn't the profit to make it be sustainable.

The world produces about 5 metric tons of CO2 per capita ("only fossil fuels and cement manufacture", says Wikipedia). 27% of that is carbon.

That's 1 ton of carbon per person.

Let's assume fish are pure carbon.

http://www.greenfacts.org/en/fisheries/l-2/06-fish-consumpti... says "Preliminary estimates for 2006 indicate a slight increase in global per capita fish supply to about 16.7 kg."

That's rather smaller than 1 ton.

https://www.popsci.com/were-catching-way-more-fish-than-we-t... says we currently take about "130 million tons of fish out of the oceans".

Fish aren't pure carbon. In humans, carbon is 18% of the body. I'll assume it's about the same for fish. That's 7.5 metric tons of fish, per capita, per year.

Another way to think of the sizes, and realize how small the fish population is, comes from https://what-if.xkcd.com/33/ :

Marine fish biomass dropped by 80% over the last century, which—taking into consideration the growth rate of the world’s shipping fleet—leads to an odd conclusion: Sometime in the last few years, we reached a point where there are, by weight, more ships in the ocean than fish.

alasdair_• 9 years ago

Almost anything that involves people NOT doing something.

For example: let's say you dislike the idea of people clubbing baby seals to death for their skins and want to reduce or eliminate the practice. If you start a business buying up seal habitats and selling them to ecological investors that derive utility from there being fewer seal deaths, all that happens is the price of seal skins spikes and (eventually) more and more people get involved in the business, bringing things down to equilibrium again.

It's the same reason that buying all the slaves in the world won't get rid of slavery - it will just encourage MORE of it.

LeonB• 9 years ago

There is gold in the ocean, in very small quantities. It's not viable to extract it.

evanlivingston3• 9 years ago

That's not really a problem.

malberto• 9 years ago

en.m.wikipedia.org/wiki/Tragedy_of_the_commons

I think you were looking for this

chkte• 9 years ago

My sister has a very serious, rare, disease. No companies have incentives to innovate in this field (pharma or whatever).

melling• 9 years ago

There are lots of rare diseases that need someone to find funding and push the research.

Saw this one in the WSJ:

https://themighty.com/author/luke-rosen/

https://www.wsj.com/articles/on-the-way-to-a-rare-disease-cu...

And this one on ABC News tonight:

https://donate.curecmt4j.org/campaign/cure-cmt4j-advancing-g...

DoreenMichele7• 9 years ago

In the US, the FDA tries to incentivize it:

https://www.fda.gov/ForIndustry/DevelopingProductsforRareDis...

The problem is this results in drugs that cost a fortune and still only helps a small percentage of sufferers, like the $300k drug for CF that only helps 5% of CF patients.

http://www.cbc.ca/beta/news/canada/nova-scotia/cystic-fibros...

nicodjimenez4• 9 years ago

Pure math, pollution, educating people with no money, income inequality, homelessness, universal health care, ...

DoreenMichele7• 9 years ago

Re: Homelessness. I have two profitable solotions for you:

1) Build affordable housing.

2) Create flexible earning opportunities that serve the types of people who are at high risk of homelessness. Ideally, make them accessible to both homeless and housed people.

A lot of homeless people have some income, just not enough to finance a middle-class life. The US has largely eliminated affordable housing, which can be profitable but probably has low profit margins.

nicodjimenez4• 9 years ago

If there was money in solving homelessness it would already have been done. If you tried to do this you would be rapidly discouraged. Just like some products don't have positive unit economics, some people don't have positive unit economics. The big "profit" from solving homelessness would be peace of mind and a better experience walking down the street. Hard to make money from these things.

DoreenMichele7• 9 years ago

Medical and health are significantly harmed by most for-profit models. You pay your doctor and big pharma for treatment, not for a resolution of the problem. This is an inherent conflict of interest.

I have a serious medical condition. I walked away from conventional treatment. I have thought a lot about how to share information about what works. Even sharing that info comes with huge challenges. I am still trying to solve that angle and may never figure it out. Figuring out monetization is even further out and looks pretty hopeless.

medz3• 9 years ago

That's because people will pay for a cure / treatment when they are sick. Unfortunately they won't pay for prevention so that they wouldn't get sick in the first place.

Besides doctors can't guarantee a resolution, they can only guarantee treatment. If doctors would get paid only for a cure, it would just create different problems. Some people would be refused treatment because the odds of getting paid would be too low, others would have their treatment stopped because continuing would likely be unprofitable and only large institutions would be able to afford to provide services since only they could play the numbers in order to statistically stay profitable.

DoreenMichele7• 9 years ago

Historically, we had a tradition of having religious types also provide health care, a la the tribal medicine man who was both a spiritual leader and person who would treat medical stuff.

Doctors under a for profit model are not remotely the only possible approach to this problem space. Some good for profit health models include gym memberships and green grocers. Eating right plays a very important role in health and welfare and you don't have to wait until you are sick to wonder if your diet could stand to be improved.

twobyfour2• 9 years ago

There are also problems that can't be solved by businesses because they ARE profitable.

For instance, a lot of aspects of poverty. Because people living paycheck to paycheck are desperate for cash and typically don't have enough savings to open bank accounts, they're easy prey for money lending at incredibly high interest rates - including payday loans and pawn shops; and for check-cashing services that take a significant cut of their paycheck. If your credit score is low, you may be able to get a pre-paid debit card (since credit/debit cards are necessary these days even to do things like open App Store accounts so you can get [even free] apps on your phone in order to do things like apply to jobs or know when the bus is coming), but it'll eat away at your money with monthly fees - whereas if you have good credit and pay your balance monthly you can be fee free.

mjwhansen2• 9 years ago

There should be a line drawn between services that cater to lower income people that are blatantly exploitative and those that appear to be profitable but are highly risky.

Pawn shops and loan sharks are explorative. Yet, there has been much research done in recent years on the business of check-cashers and payday loans. They may appear profitable based on fees, yet the reason they charge fees or higher interest rates are due to the high cost of serving their populations. A higher risk of default means a higher rate of borrowing to compensate for the risk. Lisa Servon at Penn has done a lot of interesting work on this topic, and financial services for underserved populations in general: https://www.lisaservon.com

twobyfour2• 9 years ago

Yes, they solve one problem related to poverty. But because their motive is profit, they can do so only at a cost that exacerbates the underlying problem of not having enough money.

evanlivingston3• 9 years ago

Racism

gnode• 9 years ago

I would argue that racism is impeded by the profit incentive. If someone refuses to trade or interact with another on the grounds of race, they act against profit.

evanlivingston3• 9 years ago

But racism isn't defined by or limited to refusal to trade with certain individuals. That is to say economics is only one intersection in the set of racist behavior present in our society, eliminating those economic inequality does not solve structural inequality.

Furthermore, it's so important to demographics in the midwest that they're able to refuse service to individuals they perceive as 'others' that laws have been created protecting economic discrimination.

https://en.wikipedia.org/wiki/Religious_Freedom_Restoration_...

Anecdotally, There's a pizza place in Indiana that went on the news and clearly stated they refuse to service to gay couples. The pizza store owners then raised $800,000 from kickstarter. While it's definitely an anecdote, I think it shows that discrimination can actually be quite profitable.

djbelieny• 9 years ago

Death. Oh wait, Nevermind...

Ask HN: What problems don't have a profitable business solution?

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