Profit as a Tool vs. Profit as a Goal

[flwyd]

Eric Garland has a collection of articles about Guitar Center, the company which set out to do for musical instruments what Circuit City did for consumer electronics. The first was a short post about how their business model is failing and their bonds were degraded to junk status. A few months later, he wrote a little longer article with a great

Comments

[altamira16]

This is also why you do not buy houses by national developers but by local ones.

[randomdreams]

This is a tremendous bit of writing and I'll be citing it in discussions.

[willow_red]

I see two major themes to this post, both of which I follow with varying levels of interest. The first is on investing and the effects (intended or otherwise) that investors can have on the business model and execution. The second is regarding business models and definitions of success.

While the private equity firms get lots of attention these days (and probably have most of the money), they are no longer the only option for investment. Thanks to the Internet, more and more alternatives are cropping up. Are you familiar with Lending Club? It's a peer-to-peer investment site that connects people who have money (and would like to earn dividends with it) to people who need money (to pay off higher-rate loans, fund small businesses, etc.). Currently, loans are capped at $35k, so you couldn't exactly prop up Guitar Center with it, but that might be enough to get a few events going at a community music center. Lots of financial bloggers have gotten into Lending Club, and you see the exact same argument about needing to invest some