Ask HN: What problems don't have a profitable business solution?
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?
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.
well said, the stickers anecdote is amazing by the way.
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.
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.
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
When we close ourselves off to the idea that financial insecurity cannot be solved profitably, we close ourselves off to a multitude of potential solutions.
[1] https://www.wsj.com/articles/apps-let-workers-make-every-day... [2] https://www.google.com/amp/s/www.theatlantic.com/amp/article...
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.
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.
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.
Doctors for profit might not be the only model, but I'd like to see you propose any other model that actually works.
> 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.
Er, you do know most people are either overweight or obese? It's once thing to know what's right to do, but people don't do it or spend money on it.
There hasn't been a profitable way to reduce that excess. It doesn't appear like there will be a profitable way.
0.https://en.wikipedia.org/wiki/Ocean_fertilization#Phosphorus
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.
I did a rather detailed investigation into the scheme a few years ago. The end result is provided you have a cheap source of phosphate (phosphate-rich rock is fine) and a good slow release system (think something like pumice), then the whole thing is both a massive money spinner and will capture enough carbon to reverse the current CO2 rise.
I still don't see how the numbers work out. You need about 7 tons of fish+waste per year to keep CO2 levels as they are. Only a few tens of kilos of those will be extracted via fishing.
The numbers I see are something like 1.5 kg feed for 1kg of salmon, so there's not that much waste.
You're going to have to cover huge amounts of ocean, as otherwise you're limited by the diffusion rate.
And what's the supply curve for fish? If twice as many fish are harvested, would the prices be the same? What about 10x as many fish?
How much fish are needed to reverse the current CO2 rise?
Then there are other questions like, will it induce algal blooms? if there's a surplus of phosphate then what becomes the limiting nutrient?
Most of the carbon is fixed by phytoplankton and the next stage in the food chain. As these die the carbon in the water column increases and eventually the excess carbon settles below 200m where it is trapped for thousands/millions of years.
The limiting factor to primary productivity in most oceans is the phosphate concentration. As long as you don't release too much phosphate at once then you limit the algal growth. You get around 400 tons of carbon fixed for every ton of phosphate added.
Yes we are going to have to use a large amount of the deep ocean, but there is more than enough ocean to do the job.
"400 tons of carbon for every ton of phosphate added" ... how long does that take? It's diffusion limited, yes?
Ahh, I followed the Wikipedia link to https://www.atmos-chem-phys.net/9/5539/2009/acp-9-5539-2009.... .
> Ocean fertilisation options are only worthwhile if sustained on a millennial timescale and phosphorus addition may have greater long-term potential than iron or nitrogen fertilisation.
How long would it take a company to be in the black with phosphorous mining? First the phytoplankton, then eventually the fish, so that's a few years of waiting, yes?
Since fish move, isn't this the sort of project where one company pays to put the phosphorus in but other companies can profit off the increased fish? So it requires a change to the international fishing laws for the fertilisation company to make a profit?
The response to phosphate addition is surprisingly fast - depending the fish you wanted to harvest you are looking at a couple of years at most before you had a harvestable amount of fish to sell.
The law in this area is uncertain. Under the various international treaties it is not legal to dump garbage in the oceans, but no one is exactly sure where phosphate fertilisation sits. Even if turns out to be illegal all you need to do is find a friendly pacific island nation and do all the phosphate dumping in their waters and let the ocean currents do the work for you :)
The nice thing about this idea is that it turns what appears to be an impossible dream and makes it possible to make a profit solving it.
EDIT: Oh, wait, I do have one more question. In order for this to be an effective form of carbon reduction, how much will the fish population increase? As the supply goes up, the prices will go down, and I'm still not convinced that the amount of carbon capture needed is economically justified by the increase in fish supply.
You could choose to run the whole operation semi-inefficiently where you chose to only catch and sell a portion of the fish, or use the fish as feed for other higher value fish like salmon and bluefin tuna.
My minor contribution to the idea was to workout that you don’t need purified phosphate to fertilise the oceans. We could just use phosphate rich rock to make a slow release pumice-like fertiliser that floats on the surface (using a photo-degradable polymer). This gets the phosphate cost down from around US$1600/t to something under $50/t. I wrote a paper on this many years ago, but I never got around to publishing it. I might try and turn it into a blog post if I get a chance.
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...
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...
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.
They have no goal of "solving homelessness." They are just looking to be a successful writing service. People who sign up are 1099 contract workers. I am not the only homeless person who ever worked for them.
I am currently in the process of trying to figure out how to foster more of this locally. I would like to help people with the kinds of barriers to employment who are at high risk of homelessness to figure out how to make money online. I am going to public meetings and talking with folks. So far, I have been well received. It has not been a discouraging experience.
What I have to show so far from the little amount of time I have invested up to this point is a new website aimed at becoming a resource for Independent Digital Workers:
http://independentdigitalworkers.blogspot.com/
The cheap rental I currently live in that got me off the street is market based housing. It is a for profit thing. It is not part of some homeless services program or other charity. My landlord is making money off getting me off the street.
I have also applied for a job where I have proposed developing Independent Digital Workers further as part of that job. So I find myself sitting here wondering if there is any way to "take your bet."
If I get the job and some local organization pays me to help reduce homelessness locally, would that count in your eyes as profiting from my solutions? Or would you find some new excuse to simply be dismissive?
I suspect the answer is the latter. I am pretty appalled at hearing you say that some people don't have positive unit economics. Pronouncements like that tend to be self fulfilling prophecies. There are myriad ways to sabotage someone's efforts to make their life work and see to it that they are incapable of having positive unit economics.
People with such attitudes in online forums were the bane of my existence while I was homeless. They not only would not give me useful answers to my questions about "How does one make money online?" they also were contemptuous, dismissive and actively did what they could to undermine my efforts to figure out how to make money online. I firmly believe that if I had gotten genuine support instead of this nonsense, it would have taken me less time to build my online income and I would be in better shape financially.
When I was homeless, my comments on the internet were full of typos and other problems. People dismissed me as a delusional lunatic. Etc.
If anything, I am absolute proof of how wrong you are, yet you will not acknowledge it.
My claim that there are solutions that can be both profitable and effective is not an assertion that we should abandon people with Down's Syndrome.
I think the best I can say is that you and I are talking past each other. That still doesn't make it a positive experience for me to have my ideas so completely dismissed, but I don't really expect that engaging you further will go anywhere good.
I think you were looking for this
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.