Comment on Covering costs to be Sustainable

Comment on Covering costs to be Sustainable
Anonymous Senscot Bulletin Reader
15.07.10

Regarding covering costs to be sustainable (extract of your Bulletin comment on Muhammad Yunus below)

The idea that covering costs is a condition of sustainability is a popular one – but does not stand up either philosophically or empirically.

Sustainability has nothing to do with covering costs.

The biotech industry consistently turns in massive losses and is extremely sustainable
Star in this field is Xoma Ltd which hasn’t turned a quarterly profit since its founding 30 years ago, and sustains very nicely
Amazon.com had sustained losses for many years before turning it’s first profit
ZipCar, the largest worldwide car sharing company, which has recently bought out competitors in London, is shortly to go public. Sustained losses from the outset, no profits in sight
The Swiss bank UBS, regular mammoth profits but almost hit the wall
BP??
The US Government, the UK Government…..

Need I go on?

Sustainability has nothing to do with the financials, depends only on "who’s home" with a bit of engagement and passion.

But if you believe you need to cover costs to be sustainable, this is the thin end of the wedge which can and certainly will ultimately drive you out of business and so prove you right!

From one who has listened to more than a thousand stories on this subject.

Best wishes,
A reader