Happy companies are different

Big companies are not necessarily good businesses.

 

For example, airline companies have annual revenues that reach into the billions, yet only profit 37¢ per passenger per trip. Google, in comparison, keeps 21% of their revenue as profit.

 

Airlines exist in “perfect competition” (an equilibrium of supply and demand) and thus must sell at whatever price the market dictates. Google is a monopoly and owns the entire market, so it gets to dictate the price.

Monopolies lie by exaggerating the power of their non-existent competition to dissuade others.

 

Competitive industries lie by claiming they are completely unique, while in reality the differences are insignificant.

Highly competitive industries like the restaurant business incur low profit margins and often push people towards ruthlessness.

 

Monopolies, on the other hand, can afford to think beyond short-term cash.

Back to blog