I am bringing back an old thought that first occurred to me in 2001 after the collapse of Enron. Businesses exist to create real value for real people. Any business should be able to explain how the are adding value and for whom. Ideally, this should be a simple process; a sentence or at most a paragraph. If a company can’t explain this that should raise a red flag.
Of course, some companies provide genuinely obscure products or services. These companies profits should reflect the esoteric nature of their business. The largest most successful businesses from McDonalds to Microsoft should be those companies that are serving vast swathes of the population. If a business claims that its operations are so complex that mere mortals couldn’t possibly comprehend them, that should raise about 10 million red flags.
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