> But, then how come all of the above companies built empires?
Scale based on insane amounts of venture capital and debt. If you're running 450M transactions a day like Mastercard, you only need a few cents per transactions in profit and you have a money making machine.
For example, car companies hand out huge bonuses to employees who figure out even a dollar in lower costs - at the scale of, say, Toyota with 8.6 million cars a year [1], that amounts to 8.6 million dollars more in profit. Give the employee in question a hundred thousand, the employee is happy and the beancounters even more.
Or airlines... when your average plane will always have a number of no-shows (around 5% [2]), it is more profitable to overbook and in the rare case that it does go wrong, pay off someone with 500$ in cash.
Scale based on insane amounts of venture capital and debt. If you're running 450M transactions a day like Mastercard, you only need a few cents per transactions in profit and you have a money making machine.
For example, car companies hand out huge bonuses to employees who figure out even a dollar in lower costs - at the scale of, say, Toyota with 8.6 million cars a year [1], that amounts to 8.6 million dollars more in profit. Give the employee in question a hundred thousand, the employee is happy and the beancounters even more.
Or airlines... when your average plane will always have a number of no-shows (around 5% [2]), it is more profitable to overbook and in the rare case that it does go wrong, pay off someone with 500$ in cash.
[1] https://de.wikipedia.org/wiki/Wirtschaftszahlen_zum_Automobi...
[2] https://techcrunch.com/2017/04/11/overbooking/