You walk through a mall and stop in front of a store that used to have a line out the door. Now it's empty, or replaced by a brand you've never heard of. There's a small, involuntary sadness. Something from your memory of the place is gone.
But does it deserve the sadness?
In the early 2000s, BlackBerry was a social phenomenon in Saudi Arabia before it was a technology. Its messaging service was the WhatsApp of its day. The devices were a status symbol, a signal of modernity. Then the iPhone arrived and WhatsApp launched, and BlackBerry disappeared from pockets as if it had never existed. The company's value fell from $85 billion to near zero in a few years.
Was that bad news?
Before you answer, think about who benefited from the "tragedy": every person who moved to a better phone, every company that redirected resources to more useful technology, every employee who left the collapsing firm and brought their skills somewhere that needed them. The loss of one company was a gain distributed across millions.
The signal we ignore
Profits and losses in a market are not just numbers on a balance sheet. Each one carries a clear message. Profit says: what you're doing helps people, keep going. Loss says: what you're doing isn't helping enough, change course. And that message doesn't only reach the company involved. It reaches everyone watching: investors move capital into profitable sectors, new companies enter the competition, suppliers ramp up production. The reverse happens when losses appear: capital flees, weak companies exit, resources are freed for better uses.
Profit is a green light. Loss is a red one. A healthy economy needs both.
The problem is that we treat failure and bankruptcy as disasters to be prevented at any cost. But preventing failure the wrong way is like disabling an early warning system. You don't eliminate the problem. You hide it until it's much worse.
Creative destruction
Schumpeter called this "creative destruction": every innovation displaces what came before in order to build something better. The destruction isn't aggression or greed. It's the only mechanism by which any economy advances.
What replaced BlackBerry? Phones that carry a computer more powerful than the machines that put humans on the moon. What replaced the video rental stores that closed? Streaming services that put an endless library in your hand. What replaced many traditional retailers in Saudi Arabia when e-commerce spread? Faster, cheaper, wider service reaching every home.
Profit is not greed. It's evidence that what you do is wanted and worth continuing. Loss is not punishment. It's the market saying, politely: try something else.
A healthy economy doesn't need companies that never die. It needs companies that die on time, and clear the way for what is more useful.