article thumbnail

Why Some Digital Companies Should Delay Profitability for as Long as They Can

Harvard Business Review

How can you continuously defer short term profitability to grow your network effect? But as long as there is stickiness to be created, it’s a sensible strategy. Today, AWS is a much more valuable business for the company’s long-termism. The Refresher: Net Present Value. Risk losing short-term.

article thumbnail

How Marketers Can Avoid Big Data Blind Spots

Harvard Business Review

Overcoming “short-term-ism”. One major blind spot for marketers to be aware of is “short-term-ism” that most analytics engender. The reality is that the majority of marketing activities have both a short- and long-term impact on sales. One consumer food brand almost fell into this short-term trap.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

How CMOs Can Get CFOs on Their Side

Harvard Business Review

Just 36 percent of CMOs, for example, have quantitatively proven the short-term impact of marketing spend, according to the 2013 CMO Survey (and for demonstrating long-term impact, that figure drops to 32 percent). Help CFOs focus on the long term. Why is this so challenging?

CFO 8
article thumbnail

Debt and the Future of the U.S.

Harvard Business Review

From where I sit as an economist, it's still all about the economy and the long-term impact of the problems laid bare by the Great Recession. Consider, for example, that the estimated net present value of obligations under the Social Security system is approximately $8 trillion.

GDP 15
article thumbnail

Will You Be Writing Off Your Investment in Egypt?

Harvard Business Review

In both places, we know the instability will worsen macroeconomic performance in the short term. If that is the case, and the faster growth generates higher profits for them over the long term, that might well compensate for any short-term losses from the disruption. Tunisia and Egypt are cases in point.

NPV 13
article thumbnail

What Xerox PARC Learned About Executing on Open Innovation

Harvard Business Review

As innovators engage with the market through the MVP, they learn valuable information to help them refine the product-market fit and better understand and further build for the value proposition. Net Present Value ). This iterative approach is consistent with "real options" (vs. There's a solution.

article thumbnail

How to Improve Your Finance Skills (Even If You Hate Numbers)

Harvard Business Review

But having a grasp of terms like EBITDA and net present value are important no matter where you sit on the org chart. The Refresher: Net Present Value. Do: Enroll in an online or community college class to learn about basic financial concepts and terms. How can you boost your financial acumen?