The Limits of Profit as a Measure of Value
Profit measures what a firm keeps. I used to mistake that for what the world gets. There is a common leap here: if a business makes money, it must be creating value. Maybe it is, sometimes for the firm and sometimes for customers, but not automatically a net positive for the world. Paying is evidence of demand. It is not evidence of improvement of the world.
Some profitable things succeed because they lean on our blind spots. Short-term credit can promise quick relief while deepening debt. Social apps can enable connection and creativity, yet design choices can make them to be addicting. On the other side, work with clear social benefit often struggles to capture value. Teachers shape future citizens but remain paid modestly and in some cases underpaid. Researchers create discoveries that benefit humanity yet rarely capture the upside, there are exceptions to this though such as AI researchers. Building infrastructure in regions with scarce jobs can transform communities, but the private math often fails without patient capital or public support.
To see the difference more clearly, I think we can benefit from putting two things on separate axes: value capture (profit) and net social impact.
Value capture (profit): the profit a business keep, useful for survival and scale but easy to overread when harms are pushed onto others or demand is manufactured
Net social impact: the actual total effect on people and surroundings over time, not just value created now.
If we plot then in a 2x2 grid, it will look something like this.
When you lay the axes down, you get four types:
In the top right, high profit meets positive impact. These are scalable goods: tools, cures, enablers that help people and can fund their own continuation.
In the top left, positive impact struggles to pay for itself. Think of underfunded public goods like teaching or basic research, where society gains but revenue is thin.
In the bottom right, profit comes from the wrong place. These are extractive plays that lean on confusion, rents, or dopamine loops.
In the bottom left, there is little profit and little benefit. That is trivial waste.
Products move across this map as incentives and design choices change. A social app can start in the top right by helping people connect, then slide toward the bottom right if growth targets reward compulsive use. A learning tool can begin in the top left, then climb to the top right once it discovers a model that shares upside with learners and payers. Regulation, defaults, and business model shifts can nudge entire categories up or down. The point is not to freeze a verdict but to watch the direction of travel.
I still care that things are wanted. People should freely choose them. I also care that they are worthwhile. The world should be better with them around. The work is to live in the overlap. The way forward, at least for me, is to start with the world and finish with the business. I ask whether the thing makes life a little better for the people who touch it and for those around them. If the answer is yes, I earn the right to optimize the model. I push on value creation and capture so the work does not need heroics to survive. Profit becomes a constraint I respect, not the story I tell myself about meaning.