the health strategist
institute for strategic health transformation
& digital technology
Joaquim Cardoso MSc.
Chief Research and Strategy Officer (CRSO),
Chief Editor and Senior Advisor
November 10, 2023
What is the message?
The article explores the diverse timelines it takes for successful companies to turn a profit, comparing swift successes like Microsoft to prolonged journeys such as Uber’s decade-long pursuit.
It highlights that even immensely popular services like Twitter and Amazon faced considerable time gaps before achieving profitability.
Additionally, the piece underscores the ongoing challenge for some well-known brands, like Uber and Spotify, which are yet to see an annual profit despite their widespread popularity and substantial revenues.
What are the key points?
Companies That Have Turned a Profit:
- Older tech firms like Microsoft and Apple turned a profit relatively quickly, largely due to a lack of competitors at the time.
- Microsoft, for instance, turned a profit almost immediately after starting out due to its early dominance in microcomputers.
- Twitter had to wait over a decade before turning its first profit in 2018, 12 years after its launch in 2006.
- Amazon turned a profit nine years after being founded, facing challenges such as closing down distribution centers and laying off staff.
Companies Yet to Turn a Profit:
- Despite being popular and in business for several years, just under half of the companies examined in the article are yet to turn a profit.
- Uber, despite making billions in revenue, has not seen a profit since its launch in 2009.
- Similarly, Spotify has never turned an annual profit, although there are indications of potential change with the recent report of their first-ever quarterly profit.
Methodology:
- The article uses a methodology that involves looking at the founding year of popular and successful brands and identifying the year in which they first turned a profit.
In summary:
- The article emphasizes that achieving profitability for even the most successful companies can take a considerable amount of time and that factors such as competition, business model adjustments, and market conditions play a significant role in determining when a company becomes profitable.
Infographic
DEEP DIVE
HOW LONG DID IT TAKE THE WORLD’S BIGGEST BRANDS TO TURN A PROFIT?
Forward2Me
October 14, 2023
We all hear about the record revenues that some of the world’s biggest companies rake in on an annual basis, but it can take many years for even the most successful brands to actually turn a profit.
In fact, some of our favourite services such as Uber, Spotify and Snapchat are actually yet to make their first annual profit, despite being hugely popular.
So where do the world’s biggest companies stand, and how long did it take them to turn a profit?
THE BIGGEST BRANDS THAT HAVE TURNED A PROFIT
Of the companies that we looked at, it was older tech firms such as Microsoft and Apple were amongst those to turn a profit the quickest, largely due to a lack of competitors at the time.
In fact, Microsoft turned a profit almost immediately after starting out, as the sole supplier of ‘Altair BASIC’ as well as numerous early microcomputers.
However, the likes of Twitter had to wait over a decade before turning their first profit, doing so in 2018, 12 years after they launched in 2006.
Similarly, Amazon only turned a profit nine years after being founded (and seven years after going public), after having to close down distribution centres and lay off a seventh of their staff.
THE BIGGEST BRANDS YET TO MAKE A PROFIT
However, just under half of the brands that we looked at are still yet to turn a profit, despite being very popular and having been trading for a number of years.
For example, we’ve probably all taken a Uber at some point and the company made $11.3 billion in 2018, yet they’ve still never seen an actual profit since 2009.
Similarly, Spotify have never turned an annual profit, although they could be set to change, as they recently reported their first-ever quarterly profit.
METHODOLOGY
Taking popular and successful brands founded in recent decades, we found their founding year and their first profitable financial year.
Originally published at https://www.forward2me.com/blog/turning-a-profit
