If you can’t make money from the poor, why is Walmart the biggest company? Maybe the global poor aren’t a profitable group to cater to, but the American poor seem to be a more profitable group than the American rich, by many standards.     

Ha.  No.  And the Wal-Mart example actually does a really good job of illustrating why.

Wal-Mart is indeed very profitable.  Wal-Mart, notably, is one company.  There are huge swathes of the country where this one company basically has a monopoly on the “providing any goods of any kind” market.  It maintains this de facto monopoly by ruthlessly undercutting and underpricing all manner of competitors, which is a thing that it can do because it maintains a mind-bogglingly huge and intricate global supply system.  It has razor-thin margins that it makes up for in volume.  It charges rock-bottom prices, and pays its workers as little as the law allows while finding ever more ways to wring more labor out of them. 

If there were as few as two companies trying to be Wal-Mart, both of them would fail.  If Wal-Mart were any less clever or any less hard-nosed in its business practices, it would fail. 

And once you get past Wal-Mart, in the “providing goods to poor Americans” sector, you get…well, it’s a very big field and there’s some amount of diversity, but honestly most of what you see is shitty and unpromising from a business standpoint. 

Let’s compare with the sorts of people who sell goods and services to rich people.

I was one of those people, once.  I hung out my shingle and helped the children of the wealthy prepare for standardized tests (SAT/GRE/LSAT), in a private and entrepreneurial sort of way.  I made ridiculous bank.  I think back to the amount of money I got for an hour of work, back in my tutor days, and I kind of want to cry. 

And…as it happened, I was a pretty damn good tutor, and I did a lot to help many of my clients.  But their rich parents didn’t actually have any way to know that.  My value-add was entirely swallowed up, from the perspective of an outside observer, by the unknowable disparities in the students’ starting capabilities – 

– which makes it sound like my clients’ parents were actually even looking at my performance data, which, pfffft, not even a little bit, not once.  

On those rare occasions when I was completely useless…when I couldn’t find a teaching method that would actually work for the client, and I didn’t improve his score at all…this had zero impact on anyone’s satisfaction with my work, or on my reputation, or anything.  Those clients were just as happy with me as all the others.

I was, essentially, a magic totem.  I was hired because, if you don’t get a tutor – an expensive tutor, the classy kind with fancy credentials – you’re not Doing All You Can For Your Kid.  Once you’ve performed the ritual, well, it all comes down to unknowable luck and happenstance, right?

You can offer this kind of Comforting Ritual racket in poor communities, reading tarot cards and the like, and you make peanuts.  If you do the same thing in rich communities, you make $WayTooMuch/hour.  There is a firehose of money that goes from rich people to their kids’ college educations, and if you manage to situate yourself anywhere near that blast, you’ll be showered in wealth.  It really doesn’t matter how much you’re actually contributing to anyone’s welfare.  No one’s checking; it’s a ton of work to check.  The rich folk know that the Thing matters, and that a ton of money is supposed to get spent, and the details basically sort themselves out however. 

That’s just one example; I’m sure you can think of many more.  Think of all the ridiculous artists, gurus, and consultants who survive off of rich people’s willingness to waste large amounts of money.  It’s an entire ecosystem, a viable one, because rich people have large amounts of money to waste.

Poor people don’t.  If you want to get their money, you have to provide value, and you have to do it very very very well, and you have to cut every conceivable corner.