
Ask HN: What problems don't have a profitable business solution? - ssono
Are there problems that by nature can&#x27;t be solved by businesses because they aren&#x27;t profitable? What are they? How should they be approached?
======
trcollinson
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.

~~~
nicodjimenez
"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.

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

~~~
mongeone
Does his name start with a B and he spent considerable time in Japan? If so, I
may know him. If not, amazing to hear of multiple millionaires from
stickers!!!

------
alasdair_
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.

------
twobyfour
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.

~~~
mjwhansen
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](https://www.lisaservon.com)

~~~
twobyfour
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.

~~~
mjwhansen
Sure, it certainly does. Yet there are also for-profit solutions that are
helping significantly with poverty as well and helping people manage the cash
flow and savings issues of being poor — take Instant Financial, for instance,
which allows workers to get paid daily[1], and Walmart’s MoneyCard app, which
uses behavioral finance to trick people into saving money.

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...](https://www.wsj.com/articles/apps-let-workers-make-every-day-a-
payday-1511528400) [2]
[https://www.google.com/amp/s/www.theatlantic.com/amp/article...](https://www.google.com/amp/s/www.theatlantic.com/amp/article/521421/)

------
DoreenMichele
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.

~~~
medz
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.

~~~
DoreenMichele
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.

~~~
medz
Historical practices are not counterarguments against for profit models of
medicine. Even if it was, historic non-profit models do not scale.

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.

~~~
DoreenMichele
I used to weigh 245 pounds. I am a lot smaller these days.

~~~
medz
Good for you! Not that I know what it has to do with the issue at hand.

------
eesmith
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.

~~~
danieltillett
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](https://en.wikipedia.org/wiki/Ocean_fertilization#Phosphorus)

~~~
eesmith
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...](http://www.greenfacts.org/en/fisheries/l-2/06-fish-
consumption.htm) 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...](https://www.popsci.com/were-catching-way-more-fish-than-we-think)
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/](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.

~~~
danieltillett
It is a lot more complex than this (more than a HC post), but the simple
version is most of the carbon captured is due to carbon rich waste products
falling below 200m (about 400t of carbon for every t of phosphate), while the
money is made from selling the 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.

~~~
eesmith
I agree it's complex. I see I also made a mistake - my calculations were for
"fish and fish wastes", not "fish".

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?

~~~
danieltillett
I think where you might be going astray is confusing the biomass of the fish
with the carbon fixed. The fish sit at the top of the food chain and account
for a tiny percentage of the carbon captured - they are just the profit
center.

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.

~~~
eesmith
Thank you. Yes, that was what I was missing.

"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....](https://www.atmos-chem-
phys.net/9/5539/2009/acp-9-5539-2009.html) .

> 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?

~~~
danieltillett
You actually have to provide homes for the fish (floating structures) that act
like a surface wreck. The fish then hang around the floating material and and
breed and grow.

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.

~~~
eesmith
Thank you for your patience with me. Your comments were quite informative. I'm
now well beyond the point where I can make even somewhat relevant questions,
much less comments. :)

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.

~~~
danieltillett
This is a rather hard question to answer as it would depend on how elastic
demand is for fish and how efficiently the phosphate is converted to fish.

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.

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

~~~
melling
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://themighty.com/author/luke-
rosen/)

[https://www.wsj.com/articles/on-the-way-to-a-rare-disease-
cu...](https://www.wsj.com/articles/on-the-way-to-a-rare-disease-cure-parents-
tackle-the-high-price-tag-of-research-1504094400)

And this one on ABC News tonight:

[https://donate.curecmt4j.org/campaign/cure-
cmt4j-advancing-g...](https://donate.curecmt4j.org/campaign/cure-
cmt4j-advancing-gene-therapy-for-rare-diseases/c117605)

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

~~~
DoreenMichele
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.

~~~
nicodjimenez
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.

~~~
DoreenMichele
I know of a writing service that works well for handicapped people (or single
parents, etc) to make money flexibly. The service profitable and working for
them helped me get off the street and back into housing.

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/](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.

~~~
nicodjimenez
If you are on Hackernews posting well written comments then I think you don't
fall into this category of people who I would say have negative unit
economics. But consider people with down's syndrome or severe mental
disorders. Should we leave these people out to dry? I certainly don't think
so. However, are they ever going to be able to contribute more to society than
society contributes to them? Probably not. This might not be politically
correct but I think the more we can accept reality the better we can do to
improve it. There are no safety nets in the US, you are always a few disasters
away from being homeless, this is a real problem that needs to be fixed, even
if solving this problem costs more dollars than it generates.

~~~
DoreenMichele
Most people on the street do not fall into the categories you list here.

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.

------
malberto
en.m.wikipedia.org/wiki/Tragedy_of_the_commons

I think you were looking for this

------
djbelieny
Death. Oh wait, Nevermind...

------
evanlivingston
Racism

~~~
gnode
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.

~~~
evanlivingston
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_...](https://en.wikipedia.org/wiki/Religious_Freedom_Restoration_Act_\(Indiana\))

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.

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

~~~
evanlivingston
That's not really a problem.

