Watch the costs and the profits will take care of themselves.
There seems to be an inclination among rock musicians to be very carefree with money, but I negotiate the best flight and hotel deals on our tours to maximise the band's income - I don't want too see too much taken off the top line.
Lowering prices is easy. Being able to afford to lower prices is hard.
Obviously generating revenue is what this is all about anymore, which is sad, but again, you have to find ways to make it work. But, yeah, that's certainly intriguing.
You could raise the price of, say, a bottle of ketchup to $1.03 instead of $1, and no one would know. Raising prices just 3% per product would add 50% to your pretax income. Why not do it? It's like heroin: You do a little and you want a little bit more. Raising prices is the easy way.
The concept of profit maximization is, in fact, meaningless.
If you sell a physical product, you have a lot of Q4 upside and unpredictability, but now you have to manage your cash to get to Q4 so that you can invest in building inventory to over-perform.
The value that some analysts put on revenue vs. what they put on profit is out of whack. If you can grow real cash earnings, that's 80% of what you ought to do, and the revenue component is 20%.
When you fall short of your internal forecast, two things happen: Costs go up as a percentage of sales, and margins go down.
The most important question regarding Big Data at almost any company is: How much are your customers really worth?
When you can sell [empty seats] at the gate for an upgrade for 500 bucks or 600 bucks... it makes all the sense in the world.
In the Internet economy, information is everything: The more a company knows about a consumer, the more carefully it can tailor its advertising to that customer, and the more revenue it can generate in return.
Just as we are enhancing the customer side of our marketplace, we are also looking for ways to increase our contributor expense.
